Blazing a trail of her very own
On the day her young firm, National Financial Partners, went public last September, Jessica Bibliowicz rang the opening bell at the New York Stock Exchange, as her father gazed up proudly from the exchange floor. That was literally the day Bibliowicz, 44, who has had to deal with constant comparisons to her dad, stepped out of his immense shadow. That's what happens when your old man is Sandy Weill, who created Citigroup, the model for today's financial services conglomerate.
It's also to be expected when you follow in his footsteps. From her first summer job filing annual reports for Shearson, Bibliowicz would later head up sales and marketing for the Prudential mutual funds. She then ran the mutual fund division of Smith Barney, part of the old Travelers Group that Weill merged into Citicorp to create Citigroup. But she left her dad's firm in 1997, after reportedly butting heads with Weill's then protege, Jamie Dimon.
On a roll. Today, Bibliowicz is drawing even more comparisons to her dad as she builds her business through a series of acquisitions--more than 100 since she was named NFP's chief executive in 1999. But the similarities stop there. NFP may be one of the more innovative financial firms that most Americans have never heard of. Like a myriad of banks, brokers, insurance companies, and asset managers, NFP is going after high-net-worth clients, a growing segment of the population.
In the past, "the biggies," as Bibliowicz calls Wall Street's conglomerates, sought to cross-sell a multitude of their products and services to the wealthy, ranging from money management to estate planning to insurance to wealth transfer. Bibliowicz is going a different route. Her company, which is tiny compared with the Citigroups and Merrill Lynches of the world, does not make or manage any mutual funds or insurance products. "We don't own anything that makes anything," Bibliowicz quips.
Instead, NFP buys small-to-medium-sized independent financial advisory firms--some just one-or two-person shops--that cater to the wealthy in one of three basic areas: financial planning and investment advisory services; life insurance and wealth-transfer services; and corporate and executive benefits management. "There's really nothing quite like it on any scale," says Burton Greenwald, president of B. J. Greenwald & Associates, a Philadelphia financial services consulting firm. "No one says you need to sell this product. And no one says you need to be in this market or that," says Sam Radin, a principal with the life insurance firm National Madison Group, an early NFP acquisition.
In addition to an upfront fee--part cash, part stock--for selling to NFP, entrepreneurs who join get to keep a sizable portion of the earnings their firms generate. This is all part of Bibliowicz's plan: Allow NFP firms to act like independent operations so as not to disrupt grass-roots relationships between clients and advisers. "If clients wanted some homogenized thing, they could get that somewhere else," says Bibliowicz.
So far, the approach is working. Revenues at NFP's existing firms grew 15 percent in the third quarter. But analysts say it's way too early to tell whether Bibliowicz is on the right path, though surveys show that most high-net-worth investors prefer advisers who offer products from various firms and think it's more important to work with a good adviser than with a well-known company.
Of course, taking on Wall Street's biggies is no easy task. And managing a firm filled with independent entrepreneurs is "like herding cats," says Ryan Batchelor, an equity analyst with Morningstar. Another challenge: NFP could be adversely affected if its stock price becomes depressed. NFP's share price tumbled momentarily in October when it was revealed that the company had received subpoenas from New York Attorney General Eliot Spitzer as part of his ongoing investigation into insurance industry practices. The stock has since recovered.
"The concept, whoever dreamed it up, clearly is an interesting one," says Geoff Bobroff, a financial industry consultant. But, he says, Bibliowicz must still show she can dominate the high-net-worth market the way her father dominated banking.
This story appears in the December 6, 2004 print edition of U.S. News & World Report.
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