JMB: Understanding the resources and support available through NFP is an important part of the acquisition process and obviously one of the most attractive components of the NFP deal. We also have a Firm Relations team that is involved with each firm from the very beginning. They are there offering support and guidance during the acquisition process with a goal of making it an easy transition, and then they stay on with the firm to provide counsel and act as its voice internally at NFP. For the most part, we are acquiring firms with whom we have a strong philosophical link so the early days as part of NFP are usually more about introducing them to other firms, starting their business plans, and getting engaged with the resources. At the end of the day, the firms and NFP are incented the same way, which creates an alignment that makes the transition pretty easy.

HSG: What are the most likely hiccups a firm will encounter during the integration process?

JMB: Well, this has changed a lot as our business has evolved over the past nine years. In the beginning, when we acquired a firm everything stayed the same, which made the transition to NFP very easy. Once we went public and had to comply with Sarbanes Oxley, we implemented systems for the accounting and financial controls for all our firms. These requirements were much more onerous than many firms expected. But again, it was helpful that the advisors were shareholders because they understood that it had to get done. Now this infrastructure is firmly in place and the ramp up into our system is addressed at the time of acquisition.

HSG: And these days?

JMB: Our broker-dealer, NFP Securities, has an unbelievable reputation and has become a real advantage in the recruiting process. As part of the acquisition process, we require firms to switch to our broker-dealer, which can be difficult. The good news is that we do more acquisitions than anyone so we've learned how to make the transition as smooth and speedy as possible. And because we had to be able to handle the more sophisticated business of our high-net-worth clients, we learned early on that if the central processing point is good, it can ease things considerably. We made some big investments of capital, time and talent to get where we are today.

HSG: Approximately how long is your due diligence process?

JMB: On our end, the whole process takes about 60 to 90 days. We verify revenues and expenses, visit the office, perform an investigative search on the firm, it's a very intense process. If an advisor is nervous or skeptical, or just not ready to make the decision, it can run much longer, sometimes years. But we stay in touch with the firms we like and when the owner is ready, it's amazing how fast we can move.

HSG: You did 23 acquisitions in 2006?

JMB: NFP has a full-time M&A and due diligence team, which allows us to do as much internally as we can. Our firms are also a big source of leads for us. They tell us who is good in the marketplace, it's great insight for us.

HSG: How do you forecast for the street?

JMB: We budget the amount of acquired base earnings rather than the number of firms. And we help analysts understand how much of our revenue growth we expect to be from acquisitions versus organic. We've been fortunate to exceed our acquisition targets in past years.

HSG: And how do you remain opportunistic?

JMB: We run NFP with such a clean balance sheet that we are not restricted from acting when we encounter a great firm with acquisition potential. It's a wonderful position to be in. It's a power that comes from years of operating very conservatively. We also have the luxury to wait patiently until the right opportunity comes along.

HSG: So if I talked to some of the principals, would they echo your sentiments about the benefits of be coming part of NFP?

JMB: Yes, but you have to remember that their businesses were successful to begin with, and continue to be successful because of what they put in place prior to joining NFP. NFP brings its firms more products, more services, more capital and the ability to grow faster. But at the end of the day, the advisors themselves are the people who really understand their marketplace, understand their clients, and are getting the job done.

HSG: So you are acquiring successful firms, ones that want to grow?

JMB: Yes. NFP is a public company with a commitment to its shareholders. We must have a long-term plan that makes sense so we can continue to deliver results. NFP is not a training ground and we don't do lift outs from the bigger investment firms. We want to acquire firms that are in great shape, have a good history and a good future ahead of them. Our advisors are experienced, ambitious professionals who want access to NFP to grow.

HSG: What's the biggest selling point to a practitioner?

JMB: That we respect the track records of our firms and want the advisors to stay involved, running their business they way they did right up to the point of acquisition.

HSG: You've mentioned some consistencies across your firms-they are successful, seasoned, oriented toward affluent clients. Are there other qualities they share?

JMB: Drive, all our firms are driven to succeed. Most of our advisors work with successful entrepreneurial businesses or in the high-net-worth space for clients with $10 million or more in assets. Some have even higher thresholds; say $25 to $50 million. You must have strong drive to succeed in this space given the expectations of the more sophisticated client.

HSG: What's notable about your core business of life insurance?

JMB: I think the DNA of somebody who sells high-end life insurance is unique. First, it's one of the most complex financial products. You then have to understand the client's circumstances and their charitable inclinations. An advisor has to know the best carrier for every situation and how to achieve the best possible pricing. An advisor also has to be able to bring the network of attorneys and other professionals together to make it all work. It's a comprehensive planning process. It's a truly unique skill and unbelievably complicated. That's why I love it and believe we have some of the best practitioners in the field.

HSG: What about the benefits business? How does NFP present itself in that market?

JMB: On the benefits side, NFP's primary focus is on the small- and mid-sized markets. The larger benefits firms tend to under serve those markets, so we are trying to reach out to them. We find that the cross-marketing opportunities within a client company are valuable. There is usually a small group of decision makers and retention is very important to them, and there is often a much stronger connection between management and the employees. These clients want expert advice, which is great because it allows an advisor to make a real difference for the client.

HSG: Do you offer anything for the large market?

JMB: Many of our client companies have grown dramatically while they've been with us and we continually evolve our offerings. We have a strong concentration in executive benefits, and some specific niche capabilities like nonqualified deferred compensation plans and bank owned life insurance.

HSG: The move into asset management was more recent for you. Can you describe your capabilities?

JMB: Most of our asset management firms are fee-based planners. They operate as asset allocators, using outside money managers, and work across asset classes for their clients, including alternative investments and other strategies that meet specific wealth needs. NFP's investment advisors and financial planners are a sophisticated group and I'd like to acquire more of them because they are a perfect fit for our company. Many fee-based planners are not engaged in the insurance business, but their clients need the asset protection a good life insurance plan offers. If an advisor can turn to another NFP firm for a life insurance solution, it's a great outcome for everyone-especially the client.

HSG: You place an emphasis on collaboration. Do most NFP firms maintain their existing network of professionals? Do you require your firms to work together?

JMB: Our advisors will always maintain their relationships with lawyers and accountants. They're usually long-standing and are a valuable referral source for our firms. We don't force internal collaboration. It doesn't make sense from a compliance standpoint and most professionals don't respond well to that type of directive. But, assuming the capabilities are there, most of our firms will try to keep business inside NFP. I'm more interested in helping our advisors think about expanding their business instead of fine-tuning what they already do well. Moving beyond life insurance into long term care, is an example. Being additive to their business is NFP's ultimate goal.

HSG: How do you help firms with professional development? Does NFP sponsor any forums that allow firms to interact?

JMB: Our advisors interact on the NFP intranet, through e-mail, online training, etc. It really is an engaged community. But at the end of day, this is a people business and we host quite a few big educational meetings for our advisors each year. Each of our business lines-life, benefits, investment advisory-have their own dedicated forums, as well as regional meetings focused on local trends and issues.

The best ideas surface when our advisors get together. They are so clear, so smart, ahead of the curve. They understand their businesses so well that when they start to bounce ideas off each other, it's pretty amazing how quickly new opportunities are uncovered. That's why I use words like collaboration and describe NFP as 'one dynamic company'-when getting the best for the client is the focus of everyone's efforts, it's ideal.

HSG: Can a firm work with NFP even if they aren't ready for an acquisition scenario?

JMB: Yes, those advisors can join NFP through our membership organizations-PartnersFinancial, NFP Benefits Partners and The HighCap Group. For a membership fee, these advisors have access to some of the benefits of NFP, like competitive pricing, and access to products and support. These organizations help us achieve our national scale and allow us to "greenhouse" firms that are potential acquisitions.

HSG: What does the membership entail?

JMB: One of the real attractions is the number of carriers and products we make available, which is usually much larger and more extensive than what an advisor can access on their own. An advisor can join our meetings and use our educational resources. They pay for an operational infrastructure that includes the broker-dealer and RIA platform, and technology support. For one reason or another, these firms are too small, too young, simply not interested in the NFP transaction, or not ready to do the full acquisition. In any case, it's a great introduction to what NFP offers its owned firms.

HSG: Is NFP transparent to the end client or positioned as the "solutions platform?"

JMB: Clients are associated with firms, so the firm and its advisors are always front and center. Their names are on the door, on the business cards, on client proposals and presentations. They have the option to sub-brand as an NFP Company-some do, some don't. We are seeing more firms choosing to use the NFP sub-brand, but whatever an advisor chooses to do, the relationship with NFP appears cohesive to the client and suggests a broad platform of capabilities that can be harnessed just for them.

HSG: At the end of 2006 you had over 175 firms. How does that change your roles and responsibilities as a holding company?

JMB: At the current pace of growth we have to make sure we manage it in the best possible way, create scalable solutions, and find the right balance. But the biggest difference is that we can't just keep our heads down and work quietly anymore. In the early days, we could focus on the M&A activity. Now, NFP has such a large presence in the life insurance space that we are obligated to get involved in the issues that will shape the future of the business. There are more public aspects of the business that need attention. We have to be engaged for our clients.

HSG: Any downside to the growth?

JMB: Well, there are the obvious challenges of dealing with all the different personalities and perspectives. And you want to make sure that big doesn't mean slow. We need to stay innovative, keep the great ideas and the creative juices flowing. Most of our firms haven't been part of a big company for a very long time, and in some cases never have been. We have to maintain the environment that made NFP the right fit for them in the first place, even as we grow. We have to make sure that they are part of a big company under the best possible circumstances, so to speak, and plan for the succession of our advisors' businesses when the time comes.

HSG: Your success seems to have spawned a group of people with plans to create a similar firm of advisory firms, but no one seems to have any real traction. Any thoughts on why?

JMB: We had unbelievable capital from the start and were able to make some big, smart acquisitions, so we got important scale early. Some of these circumstances can't be replicated. But I think the profile of our firms has a lot more to do with our success. We attract established professionals that want to be part of something bigger. They've got a long-term outlook and an incredible work ethic, which leads to our results. Another key factor for NFP is our management team. We have the best-of-the-best working across all our departments. I count myself lucky to have attracted such talent.

HSG: So this isn't a roll-up strategy? Or an exit alternative for a maturing advisory practice?

JMB: It's difficult to attract our caliber of talent when the short-term goal is to acquire a handful of firms and flip the company. There's a belief that amassing assets is enough, but assets walk. Clients buy professionals, and you need professionals that take pride in their discipline, pride in the name on the door and the business they built. Look, the idea of building the next NFP is incredibly attractive because of our success, but, having gone through it personally, successful execution is incredibly difficult.

HSG: Can you share some of your thoughts on future growth and how you'll be positioning NFP moving forward?

JMB: We still like the integration opportunity, so on the M&A side we're looking for benefits firms and wholesale-type organizations. We see those companies as growth engines for our other firms. And we'll continue to help our firms diversify by branching out into complementary areas that help them better meet their clients' needs.

HSG: What's the best approach to the diversification Opportunity?

JMB: We'll pursue it from both sides simultaneously-work with the life producers to support expansion into areas like benefits and investments, and help the investment advisors take their business beyond the strict scope of money management.

HSG: What do you view as one of your biggest future opportunities?

JMB: I think the insurance business is very exciting now. There are more financing options available, there are more exits available, wealthy clients are looking at the risk components of their portfolios differently and looking for ways to manage volatility. The idea of a guarantee can be very alluring. Our advisors are true specialists, they can add tremendous value operating in a discrete capacity and making the pieces work together. Plus, they have the billion-dollar buying power of NFP behind them. So, if there's a $150 million life case that has to go out to 15 to 20 carriers-we have those relationships and that negotiating leverage.

I also believe our willingness to conduct "shared" business will give us a real advantage. It's not an approach favored by a lot of financial professionals, but our firms collaborate with each other quite a bit in order to deliver a total solution to clients.

HSG: What will allow you and your firms to grow?

JMB: Doing what we can to make it easier for our firms to operate and, more importantly, grow. Our advisors have a true understanding of what their wealthy clients need and it's our job at NFP to create the right mix of product and support to ensure that, in the end, the client receives the best service available in the marketplace.