He was born into a pizza dynasty, but Marty Bicknell got a taste of the financial planning business early, rose up through the ranks of a storied broker-dealer, and has been rolling up not dough but financial services companies.

Indeed, his firm Mariner Holdings has been aggressively acquiring new RIAs and investment managers since its launch in 2006. If you ask him about it, he’ll make it sound easy—a matter of luck as much as planning, and ponders whether he would have ever tried it had he forecast the financial crisis. But in the eyes of some, he might have also been driven by the desire to recreate the culture of the late, widely revered broker-dealer he spent about 16 years working for, AG Edwards, as he laid down a blueprint for a new national firm.

Since Bicknell founded Mariner Holdings in Leawood, Kan., the firm has bought companies or lifted out groups some 32 times—including investment managers like New Jersey’s Brinton Eaton; RIAs like Jersey Shore firm Housen Financial Group and Vantage Investment Advisors in State College, Pa.; and even a boutique investment bank, the Allied Business Group, in Kansas City, Mo. There are many ways to skin a cat—or, for a firm like Bicknell’s that started small with a huge war chest, to go national—but he has bucked trends in several ways.

For starters, even though he started out targeting the high-net-worth market as a consultant (trying to be a Callan for rich people, says one Mariner C-suite executive) his firm still has no account minimums. He also leaves a good chunk of the financial firms he acquires in the hands of the men and women who started them. He’s not looking for people hoping to cash out or retire on the job.

Even Bicknell can’t say that this was all part of the grand plan. He founded his firm just before the market crisis hit and found lots of companies suddenly on sale.

Bill Greiner, the chief investment strategist at Mariner for almost three years, says Mariner Wealth came about in part as a reaction to changes in the high-net-worth space. As other firms made their investment expertise the star attraction, Bicknell and his partners, many of them former AG Edwards people, wanted to keep wealth management as the centerpiece.

“They wanted to [focus] on the entire financial picture, even if it was recommending what kind of insurance policy they needed to buy for their kids’ auto insurance, whatever it might be,” Greiner says, In that way, the firm could stand out from others in the Kansas City region. That philosophy likely served the company well at a time when investment managers were living and dying by what the S&P 500 was doing, and when markets made fickle friends.

“We started the company with the sole purpose, the sole idea of being wealth advisors for ultra-high-net-worth and serving them from a planning perspective,” Bicknell says.

Beginnings
Martin’s father is Gene Bicknell, a serial entrepreneur who worked in everything from life insurance to plastics for trash bags to movies (he also ran for Kansas governor twice) but who found real gold in pizzas—specifically the single-unit Pizza Hut franchise he bought in the mid-1960s that he later turned into an empire of almost 800 stores in 26 states. That company, NPC International, was the largest Pizza Hut franchisee at the time it was sold to Merrill Lynch Global Private Equity in 2006 for $615 million. The huge payday didn’t seed Mariner, Bicknell says, but he admits that it helped later, likely in both giving the firm assets to manage and deep pockets for its coming acquisition spree.

Bicknell says of his father, he “was the kind of individual that worked from the moment it opened to the moment it closed. He would bus, would serve tables, would mix the dough, would do all of that. And he kept plowing everything back into the business and opened a second store and a third store and a fourth store.” Hard to think now that pizza, which Bicknell grew up eating every Sunday, was a risky investment back in the day. “I can remember his stories of bankers or business partners telling him that pizza was a fad.”

The pizza business wasn’t in the cards for Martin, though. In his second semester of college, while he was considering law, he interned for an Edward Jones rep in his hometown of Pittsburg, Kan., in the southeast corner of the state, and fell in love with the work. He later moved on to AG Edwards and started work right out of college in 1991. Eventually he ran a company office in Overland Park with 45 advisors.

A legendary St. Louis brokerage, founded in 1897 by an Abraham Lincoln acquaintance and assistant secretary for the Treasury, AG Edwards lost its family leadership in 2001. Seven years ago, in 2008, its candle finally went out for good after it was absorbed by Wachovia (then again later by Wells Fargo; Bicknell stayed until 2006).

Like some lost city of Troy, AG Edwards’ culture lives on the hearts of many veteran reps. Mindy Diamond, a recruiter with Diamond Consultants in Chester, N.J., says that former AG Edwards reps still ask her if companies like that one exist—hoping to find someplace that recreates the brokerage’s legendary environment of fun, bureaucracy-busting and emotional proximity to clients. The famous intense drive of brokerages to make minimum production quotas and boost the P&L statements was unknown at Edwards, say its hagiographers. So were non-compete clauses, says Bicknell. It regularly made Fortune magazine’s lists of best places to work.

When you’re “18 or 19 years old, what do you really know?” Bicknell asks. “Just thinking about what career do I want? I don’t know if I could have told you what a financial advisor was. I was really given the opportunity to get my foot in the door and get a taste for financial services. … I’ve had every job you can possibly have in this industry. I was a receptionist, a cashier, a wire operator, a service assistant, then a junior advisor, an advisor, ultimately in management at AG Edwards.”

The late Benjamin F. Edwards III, the last family scion to lead the company (the great-grandson of the company founder), gave the ambitious upstart Bicknell the chance to try a team approach at the firm. “If you think about a typical large firm, called a wirehouse firm, in my opinion the best producer is usually not the best advice-giver, and in that compensation model, the best advice-giver could starve to death, because if you can’t drive new client relationships, you’re obviously not going to drive revenue to the firm. So my thought process was to get that business development person, to get that rainmaker, and surround them with different areas of service expertise, whether it be financial planning, whether it be investment planning—each of the components that’s needed—and build a better advice and service model to support that producer.

“It was extremely successful, and at a certain three- or four-year time frame after starting the team concept, they were flying me all over the country having me teach other advisors how to do it.”

Bicknell might have stayed at AG Edwards forever, he says, had the guard not changed, bringing the Edwards family’s 115 years of leadership to an end. Bicknell has no ill words for the company, but the cultural change has been cited by many, often in harsher terms, especially after it was sold, which some of its brokers saw as a betrayal.

Running On Top of a Tortoise
Bicknell emerged from the collapsing firm with his new one eight years ago. And Mariner is young in more ways than one. The oldest partner is 54; Bicknell is 46. The clientele tends to be younger entrepreneurs as well, too, says Bill Greiner, the company’s chief investment strategist.

“Our clients generally are people who created the wealth themselves,” says Greiner. “They are not second- or third-generation wealth recipients. They tend to be entrepreneurially driven people. Then tended to have owned their own businesses in the past or they are senior executives or corporate executives at a large company. Those kinds of people normally are very comfortable with balanced risk-taking, otherwise they wouldn’t have been a small business person.”

Because of the area they hail from, that has meant a lot of clients in agriculture, oil and gas, and small niche manufacturing businesses around the Kansas City area, but Bicknell says that, with the new push to the coasts, some of the firm’s newer RIAs cater to different types of clientele—even athletes.

At the same time the firm was building up its wealth management approach, it also found itself with the opportunity in 2009 to buy an investment manager during the depths of the financial crisis: Tortoise Capital Advisors, a specialist in energy infrastructure master limited partners that, according to Greiner, needed a capital infusion (MLPs, which work somewhat like real estate investment trusts, were fighting against slipping energy use and strained credit that hurt their ability to pay their much-loved distributions). Tortoise might have seemed like an exotic purchase for a wealth manager, but it became the cornerstone of an investment empire.

And the turnabout was tasty. At the time, Tortoise had $1.3 billion in assets under management; that has since ballooned to $16 billion, and the entire investment management business of Mariner (collected into the subsidiary Montage Investments) has $25.5 billion in assets in 14 asset companies. The Mariner Wealth side, which has $12.5 billion, started on its wealth advisory purchases in 2012 with four acquisitions. Bicknell calls that the year of Mariner’s coming out party as a rollup acquirer.

These are firms owned by younger people, and the plan is to let them keep 40% of their ownership so they still have a vested interest in the company (and little incentive to go start rival firms after they make their earn-out). “The firms we buy [have] to look at the investment management business the same way we do,” Greiner says. “The center of the equation is wealth management.” In other words, the firm is looking for style-agnostic firms whose ideas and variety can be plugged into the wealth management wheel and the strategic and tactical asset allocations. Plain vanilla large-cap managers aren’t on the radar.

To outsiders, it might look like Mariner made a cagey decision to start small, build up a fleet of investment management firms and then find RIAs as a pipeline for the products. Bicknell says that it wasn’t planned as such, and opportunity simply played a big part. The two sides of the company fed off each other. He also stresses that the wealth management business, Mariner Wealth, is open architecture, and Montage products represent only 20% of Mariner Wealth’s client assets.

“When 2008-2009 occurred, it gave us an opportunity to approach growth and approach our kind of strategic thought a little bit different, and that’s mainly because we were able to attract talented individuals that, if it wasn’t for the turmoil going on, a firm our size and age wouldn’t have been able to attract. And that’s when we really began to get into the asset management side.”

David DeVoe, the founder of DeVoe & Co. and a consultant on RIA mergers and succession planning in San Francisco, says that companies with bulk like Mariner’s and Savant Capital’s have reached a tipping point where they can buy things like investment banks (in the former’s case) and tax planning firms (in the latter’s), that might have otherwise been considered outside their expertise, to create a bigger service offering.

Bicknell describes a wheel with clients in the middle and all the services around the edges. “We want to put our advisor in the center of that wheel and bring them tools and resources to serve the client,” he says. “So we actually have three tax and accounting practices, we just acquired a 401(k) provider, we bought the investment bank, we started a trust company, we have an insurance agency for life insurance around estate planning and things like that.”

A Steady Acquisition Diet
DeVoe says it’s also notable that Mariner has moved into larger cities like Philadelphia. “Mariner has created a value proposition with Midwest executives that could resonate with investors in large cities. One could say [Bicknell’s] delivering that with Midwest values.”

Last April, Mariner bought Housen Financial Group, a Manasquan, N.J., concern, after Chris Housen, an Arthur Andersen vet who had founded his namesake CPA and high-net-worth planning firm with a cell phone and laptop in 1994, was wowed by the toy store of investment products and back office help he’d get from Mariner. Housen, whose office stands out in its town by being based in a replica of an old train station, hadn’t even been thinking of a merger or any other kind of transition before. But he saw what being part of Mariner had done for Brinton Eaton, a competing firm, and RR Advisory Group in New York, “two young guys, and I heard they were growing like mad, and I was wondering how two guys younger than me were in growth mode.”

“I had been approached by banks and rollups, and it never really fit,” Housen says about the sale of his firm, which had $817 million in AUM. “I wasn’t looking for a cash-out. I wasn’t looking to be part of an IPO down the road. I knew growing our business to be what I wanted it to be required more people, more talent, depth, trust company, CPA firm, lawyers, all those things. … When I met [Bicknell] he had all these things built. He had the resources to do what I wanted to do.” Housen was also able to palm off things that most entrepreneurs don’t want to deal with on his larger partner—cumbersome human resources chores such as payroll, medical plans, employee searches, IT, etc.
“I didn’t want to grow a compliance department, grow a technology department, hire controllers. They do that.”

What Mariner can’t do at this point, it can buy. Greiner says that Brinton Eaton brought along a ETFs mainly, but they had deep strength in strategic allocation modeling.

“Actually their strengths are much deeper than ours,” Greiner says. “So we inherited and adopted a lot of their processes on strategic allocation modeling.” That means looking at more than expected return, standard deviation return and correlation coefficient and seeing where they are historically. It also means looking at potential markets we’re in—normal market, inflationary and deflationary—and looking at how those “regimes” have worked historically before plugging in expectations.

Bicknell’s financial resources can’t be overstated in Mariner’s ownership structure. He owns 90% of the company. But Mariner Holdings, the company that holds both Mariner Wealth and Montage, are held by a series of trusts. “They’re perpetual trusts, so they’re dynasty trusts,” he says, “that are intended to last forever. And the majority of those beneficiaries don’t exist today.”

If he were to get hit by a bus tomorrow, in other words, the corporate structure is in place to allow the company to continue for its own sake. He’s not interested in an IPO or a sale to a competitor.

“We’re trying to build a company that lasts well beyond me or frankly anyone that exists here today,” he says. “One that can provide benefits to those trusts for a really long time and for employees that don’t exist here today.” He says he’s visited 200 firms a year for the past three years to make just a handful of acquisitions. The plan was always to go national and even build a $50 billion firm. “Today national means something different to me than it meant then. It’s much more important to us today that we have the right people, the right locations and the right strategy than pure AUM or pure size.”