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.