Post on 03-Jan-2016
Financial Services: Financial Services: New Propositions and New Propositions and
ImperativesImperativesJessica BibliowiczJessica Bibliowicz
Chairman and CEO, Chairman and CEO, National Financial PartnersNational Financial Partners
OverviewOverview
About NFPAbout NFP• VisionVision• Business Highlights Business Highlights • NFP NetworkNFP Network
Management LessonsManagement Lessons• OpportunitiesOpportunities• What Makes It WorkWhat Makes It Work• Fostering Growth/Protecting ShareholdersFostering Growth/Protecting Shareholders
Questions/DiscussionQuestions/Discussion
NFP’s VisionNFP’s Vision
Be the preeminent distributor of financial Be the preeminent distributor of financial services to the high net worth and growing services to the high net worth and growing corporate marketscorporate markets• Create opportunities from inefficienciesCreate opportunities from inefficiencies
Enable network of financial specialists to Enable network of financial specialists to maintain entrepreneurialism while maintain entrepreneurialism while leveraging scaleleveraging scale
Align interests of shareholders, NFP firm Align interests of shareholders, NFP firm principals, employees and clientsprincipals, employees and clients
NFP HighlightsNFP Highlights
Leading pure-play high-end financial Leading pure-play high-end financial services distribution company services distribution company
Growth from a zero base of revenue in Growth from a zero base of revenue in 1999 to more than $500 million during last 1999 to more than $500 million during last 12 months12 months
Strong performance since 9/03 IPO Strong performance since 9/03 IPO allowed NFP to complete a secondary allowed NFP to complete a secondary offering less than seven months lateroffering less than seven months later
The NFP NetworkThe NFP Network
Scale and reach of 136 owned and more Scale and reach of 136 owned and more than 180 affiliated firmsthan 180 affiliated firms
Acquired and affiliated firms in more than Acquired and affiliated firms in more than 40 states and Puerto Rico40 states and Puerto Rico
NFP firms provide products and services in NFP firms provide products and services in three primary areas: three primary areas: • Life insurance and wealth transfer Life insurance and wealth transfer • Corporate and executive benefits Corporate and executive benefits • Fee-based planning and investment advisory Fee-based planning and investment advisory
services services
Keys to Expanding DistributionKeys to Expanding Distribution DemographicsDemographics
• Growing marketsGrowing markets• FragmentedFragmented
Acquisition programAcquisition program• Selection and due diligence processSelection and due diligence process• Economic alignmentEconomic alignment• PermanencePermanence
Ongoing strategic partner fostering growthOngoing strategic partner fostering growth• Provide access and benefits of scaleProvide access and benefits of scale• Ability to diversifyAbility to diversify• Best practicesBest practices
The NFP BridgeThe NFP Bridge
Benefits to Product ProvidersBenefits to Product Providers
• Increased access to Increased access to attractive marketsattractive markets
• Enhanced distribution Enhanced distribution efficiencyefficiency
• Access to specialists and Access to specialists and market expertisemarket expertise
• Opportunity for co-Opportunity for co-development of productsdevelopment of products
• Expanded lineup of Expanded lineup of productsproducts
• Superior marketing Superior marketing and technical supportand technical support
• Branding and Branding and marketingmarketing
• Benefits of scaleBenefits of scale• Synergies across firmsSynergies across firms
Benefits to NFP FirmsBenefits to NFP Firms
NFP Platform Creates Value for Manufacturers and DistributorsNFP Platform Creates Value for Manufacturers and Distributors
Product Product ProvidersProviders
DistributorsDistributors(NFP Firms)(NFP Firms)
Management OpportunitiesManagement Opportunities
Focusing on growth while remaining Focusing on growth while remaining disciplined with corporate overhead disciplined with corporate overhead • AcquisitionsAcquisitions• ““Same store” revenue growthSame store” revenue growth• Leveraging corporate resources across growing Leveraging corporate resources across growing
revenue base revenue base Educating investment community about Educating investment community about
NFP NFP • Unique storyUnique story• No clear comparable companiesNo clear comparable companies
What Makes It WorkWhat Makes It Work
Building the right organizationBuilding the right organization• No regional management layersNo regional management layers• Team approach to coverage Team approach to coverage • Good alignment Good alignment • Limited conflictsLimited conflicts
Good transition from financial Good transition from financial transaction to strategic benefit of transaction to strategic benefit of becoming an NFP firmbecoming an NFP firm
Early wins Early wins
What Makes It WorkWhat Makes It Work
NFP is a strategic partner not a NFP is a strategic partner not a “holding company”“holding company”
Unique acquisition structureUnique acquisition structure• Motivates producers with long-term Motivates producers with long-term
incentives that create shareholder valueincentives that create shareholder value• Allows firms to retain product Allows firms to retain product
independenceindependence• Aligns interests of owners and producersAligns interests of owners and producers• Succession opportunitiesSuccession opportunities
Unique Acquisition ModelUnique Acquisition Model
Current Operating Company
BecomesSubsidiary
of NFP
Management Contract Provides for:
Earns Management Fees Acquires 100%
Principal(s)Are
IndependentContractor(s)
• Principals’ ability to manage business of NFP’s operating company
• Share financially in growth of business
• Access to Best Practices and resources of the NFP system
• Non-Compete / Non-Solicit Covenants
Transferable Asset with
Value
Fostering Growth…Fostering Growth…Protecting ShareholdersProtecting Shareholders
GROWTH:GROWTH:
Compelling financial Compelling financial
incentivesincentives
Access to strategic Access to strategic
advantagesadvantages Enhanced economics Enhanced economics
derived through scalederived through scale
Product enhancementsProduct enhancements
Joint business Joint business
opportunitiesopportunities
PROTECTION:PROTECTION:
Revenue diversificationRevenue diversification
Firm diversificationFirm diversification
Cumulative preferred Cumulative preferred
earnings structureearnings structure
Economic alignmentEconomic alignment
Non-compete / non-Non-compete / non-
solicit agreementssolicit agreements
Questions/DiscussionQuestions/Discussion
How do you help people understand a new How do you help people understand a new business model?business model?
How do you develop the right How do you develop the right management team?management team?
How do you encourage relationships How do you encourage relationships among a network of highly independent among a network of highly independent group of entrepreneurs? group of entrepreneurs?
What’s the key to maintaining an What’s the key to maintaining an entrepreneurial atmosphere while entrepreneurial atmosphere while managing growth?managing growth?