Ed O'Malley & Lisa Kottler
Founded in 1998, National Financial Partners (NFP) is a national network of independent financial advisers consisting of more than 180 owned firms and more than 320 members in 41 states and Puerto Rico. Headquartered in New York City, the company’s adviser firms specialize in life insurance and wealth transfer, corporate and executive benefits, and financial planning and investment advisory.
Ed O’Malley, Senior Vice President of Corporate Benefits, and Lisa Kottler, Vice President of Retirement Services, at NFP, spoke to PLANADVISER about NFP’s value proposition for advisers in the retirement plan and benefits space and where the firm is going in 2008 and beyond.
Tell me about NFP’s structure.
O’Malley: NFP is a distribution company of independent financial professionals who deliver wealth transfer solutions, advisory and investment services, and corporate and executive solutions to high-net-worth and corporate clients. In 2008, we redefined our corporate benefits division as two primary business lines: health and retirement. The health side includes health and welfare, voluntary benefits, and disability insurance. The retirement side, which is headed up by Lisa, consists of the qualified plan business [401(k) and 403(b)], nonqualified and deferred compensation, and long-term care.
How do those disciplines interact?
O’Malley: We moved the retirement plan business over to our corporate benefits division in 2004, hoping that we could inspire our existing health brokers to sell retirement plans to their current client base. We have been successful in those cross-selling efforts through our Build It, Buy It or Rent It strategy. NFP firms can hire a 401(k) expert, acquire a book of business, or partner with an NFP firm that has 401(k) expertise.
Kottler: Many of our firms actually have developed a relationship with other NFP firms that have an expertise that they are lacking. So, if a retirement plan adviser walks in to meet with a plan sponsor and the plan sponsor says, “I would love to talk to you about our company’s retirement plan but our health-care costs are skyrocketing,” our advisers have the ability to pivot and say, “Great, let me bring in our benefit specialist to meet with you.” Once the health-care issues are resolved, then the adviser can address the retirement plan.
Can you describe the type of growth you anticipate in the benefit and retirement plan space?
Kottler: Today, the NFP owned and member firms manage retirement plan assets across more than 4,500 plans and we have more than 120 advisers that have retirement plan business. We also have 30,000 corporate clients on the health and welfare side—and, for many of those, we are not currently working with their retirement plan. Even if we never brought in another retirement plan producer, the opportunity we have organically to grow this business is huge.
O’Malley: If I ask the top 10 health and welfare advisory firms where they expect to receive most of their growth over the next two, three, or four years, I would say about seven out of 10 of them would tell you that their expectation is to see that growth on the 401(k) side. It is taking their existing client base and reintroducing their firm’s service model with a retirement capacity.
What kind of support are you giving your health and welfare firms in order to prepare them for these opportunities?
Kottler: Our practice management division at NFP is very engaged with our firms in helping them hire a high-quality 401(k) producer. We do a lot of the legwork: identifying candidates, scrubbing the data, and then only putting qualified leads in front of our firms for them to interview. Once the firm identifies a candidate, we then help them create the compensation structures. At the same time, here in our distribution facility, we are developing the tools, resources, and sales and marketing support our advisers need to be effective in the retirement plan business. So, it is a pretty attractive opportunity for a 401(k) producer to walk into a built-in set of corporate clients and have an arsenal of tools and resources at its disposal.
Who is the adviser NFP is looking for?
Kottler: I would say it is someone who is truly independent—who doesn’t want to be tied to a particular vendor, product, or carrier. Someone who wants the ability to operate in an open-architecture environment and work with best-of-breed manufacturers. I also would say it is the adviser who is already well-established and is looking to get to that next level and “institutionalize’ his practice, but recognizes that it is tough to do on his own. Also, he realizes that the best way to do that is to tap into the tools, technology, and practice management resources that we offer.
What do you think is the value of NFP?
Kottler: I have never seen a producer group in the industry that has the culture of sharing that you will find at NFP. If you ask any of our advisers what keeps them at NFP, they will tell you that it is that partnership, that culture of sharing. It may be the tools and technology that attract them initially, but it is that ability to share ideas, success stories, and sales strategies with their peers—some of the best in the industry—and the ability to do that on an ongoing basis, that is really what keeps them here.
What is the future of the benefits and retirement business at NFP?
Kottler: Certainly advisers need to help the plan sponsor, but we also want to leverage our advisers’ time so that they can get out and help participants. The bottom line is, are we helping employees financially prepare for retirement? Automatic programs now being embraced are terrific, but they are certainly not a panacea. We still have to be engaged with participants.
O’Malley: We feel that it is our responsibility and our opportunity to be better advocates for the individual consumer. We want to be everything we can be on the corporate side for the CEO, CFO, and HR folks. We’ve got to give them the best tools and resources to make educated decisions. At the end of the day, if we are not able to move the needle on our ability to positively influence the experience of the individual consumer with health care and retirement, we’ve missed a tremendous opportunity as an industry.
*Photography by Sanford Schulwolf