I received a tremendous response this past month from readers and listeners far and wide regarding our coverage of Citigroup and their deceptive and contradictory marketing schemes. This month we are going to take it a bit further.
Back in September the New York Post reported that the daughter of Citigroup CEO Sandy Weill magically managed to weasel through the supposed strict listing rules of the New York Stock Exchange and get her company listed. Jessica Bibliowicz and her company, National Financial Planners, had failed to meet the traditional listing requirements of the NYSE, but managed to pass some alternative test. Quite frankly, I could care less about that. Sandy Weill was on the board of the NYSE so you do the math. What really disturbs me is what this company does, how they are presenting themselves, and whom they are in cahoots with.
National Financial Planners calls itself a “bridge” between large Wall Street firms and small-town financial planners and insurance agents. Registered Representative Magazine, which is the leading trade magazine for the brokerage industry, wrote a terrible one-sided, glowing piece on NFP in its February 2002 edition. This piece was so radiant it was as if NFP’s own public relations firm had penned it. Registered Representative should be ashamed of publishing this self-dealing, self-serving crap. Industry rags should be honest if they want the perception of their industry to improve.
NFP started out with $125 million in capital and has spent the last 4 years buying up small-town financial firms and insurance groups. The article goes on to proclaim how lucrative the transactions have been for both NFP and the acquired firms. Jessica Biblowicz states that the firms NFP acquires benefit from access to capital, technology support, the ability to cross-sell products, volume discounts on investment products, as well as a stake in NFP. In return NFP gets 50% of their free cash flow. The stated goal of NFP is to dominate markets throughout the country by buying up all the small investment firms available. In essence creating a national investment house no different then the already existing wire houses, except the public won’t know about it. The once independent firms will keep their letterhead. This is a brilliant diabolical plan worthy of James Bond’s old nemesis SPECTRE (Blofeld Lives).
NFP proclaims and portrays themselves as some sort of independent outfit, but when looking at NFP under the microscope it is easy to discern that Jessica’s company is not much different then her father’s Citigroup. Just another wolf in sheep’s clothing. It is intriguing that a company whose core business is managing individual’s assets is incessantly proclaiming how profitable they are. Hey Jessica…How about your clients? Are they making money? What are they being charged? We were not surprised to discover that NFP and their new partners are now pushing a great deal of Citigroup products. There was a real shocker!
The client/advisor relationship should be like a patient/doctor relationship. Could you imagine when interviewing a doctor, instead of giving you his or her credentials, brags about how much money he or she makes, coupled with the fact that he or she has a cigarette machine in the waiting room. Time to find a new doctor! Firms that are selling out to NFP are, in essence, selling their soul. The client is the center of the independent advisors universe; not creating wider margins and profits by any means necessary. I am in the business of making money just like any other good capitalist, however; sacrificing my clients’ returns to make an extra buck or two is out of the question. When selling out in this manner your ability to be and do everything for your clients is infringed upon. The structure and demands of NFP are designed to make the once independent outfits a commission-generating machine. Not once, in any press release, interview or even on their website do we hear how NFP is going to benefit investors. Independent financial advisors are the last stand and advocate for investors, NFP is attacking our turf and we are going to defend it. Sorry Jessica we are not going to sell our soul, we are not for sale.
“So we meet again..Citigroup.”