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Rating:How Valuable is NFPs Distribution? Not Rated 4.0 Email Routing List Email & Route  Print Print
Tuesday, January 14, 2003

How Valuable is NFPs Distribution?

by: Sean Hanna, Editor in Chief

It may not be a bad time to be a financial planner after all. In a stock market that looks askance at nearly any new offering Jessica Bibliowicz is preparing to take her five-year-old National Financial Partners public. The deal is expected sometime in the first quarter of this year, reports Dow Jones, and the firm has already begun its quiet period.

Even more eye opening is the value that Bibliowicz sees in what is essentially a roll-up of financial planning firms. The deal is expected to go out at a price that would provide NFP with a market cap of $1 billion, or more than three times it current annual revenue of $300 million.

That price tag would be equivalent of 6.7 percent of NFP's $15 billion of assets under management.

Of course, what NFP is selling is distribution along with asset management fees. NFP has acquired more than 100 planning firms to date (at a reported price of 2.5 times the owner's annual compensation) and now claims more than 900 planners under its umbrella. It is also renting access to that distribution by cutting deals with "preferred" partners who get special access to its planners for meetings and materials.

It most recently cut this type of deal last week with Minnesota Life's Securian Retirement unit for retirement products (it also has a retirement deal with Principal Financial). On the affluent side of the equation NFP has an alliance with EnvestnetPMC.

The firm's initial war chest came from $125 million invested by Apollo Fund IV, if the IPO floats look for the NFP to plunge back into the acquisition market with renewed vigor.  

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