National Financial Partners Corp. has once again asserted itself into the high-profile game of acquiring the practices of financial advisers. On Thursday morning, the company announced that it has purchased a long-affiliated firm, Fusion Advisor Network.
National Financial Partners, through its independent-broker-dealer and advisory organization, NFP Advisor Services Group, had been one of the most aggressive buyers of financial advisory practices before the 2008 financial crisis, which derailed that effort. Advisers typically sold a percentage of their practice to National Financial Partners in return for company stock, which traded above $54 per share in October 2007, the market high, and then fell as far as $1.21 just 13 months later
On Thursday afternoon, shares of National Financial Partners were trading at $13.82.
While National Financial Partners has recently made a number of acquisitions in its other businesses such as its corporate client group, the purchase of Fusion, with 240 reps and advisers who produced $60 million in revenue last year, is a return to form, one analyst said.
“This is the first big acquisition [of advisers by NFP] I can recall in the past couple of years,” said Mark Finkelstein, managing director and lead insurance analyst with Evercore Group LLC. “The acquisition strategy did slow for a period when they had challenges.”
Terms of the deal were not immediately disclosed.
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NFP Advisor Services Group already includes Fusion Advisor Network in its statistical profile of 1,776 affiliated reps and advisers and $369 million in total revenue, according to InvestmentNews'
B-D Data Center.
The acquisition of Fusion, however, is expected to improve the broker-dealer's margins by 75 to 100 basis points, said Jessica Bibliowicz, chairman and chief executive of National Financial Partners.
Another benefit to the transaction is that Fusion's founder, Stuart Silverman, will remain with the firm as chairman emeritus, she noted.
“We are definitely on the acquisition path, and have been for quite some time,” Ms. Bibliowicz said, adding that the firm has focused on both its corporate-client and adviser services groups. “This transaction with Fusion is really a way for us to provide higher-quality services [to advisers],” she said. “We know Fusion well. We've been their back office” since the firm's inception in 2003.
Mr. Silverman said that Fusion will remain focused on services to advisers, such as consulting and practice management.
Since 2000, when National Financial Partners launched its effort to buy investment advisory businesses, many more groups have jumped in and expanded rapidly. They include large networks, such as independent broker-dealer LPL Financial LLC, and smaller firms that are owned by advisers and look more like boutiques, such as HighTower Advisors LLC.
“Twelve years ago [National Financial Partners] was a little unique and out there, to be focused on independent broker-dealers,” Ms. Bibliowicz said. “All those competitors are actually a positive, because it helps the market understand there's a world [for advisers] beyond the employee model” of the wirehouses, she said.
