NU Online News Service, May 5, 2004, 6:01 p.m. EDT – Nationwide Financial Partners Corp., New York, is paying its managers more these days because their firms are doing better.[@@]

Management fees ate up 17.2% in revenue during the first quarter, up from 14.5% during the first quarter of 2003.

NFP, which has no ties to Nationwide Financial Services Inc., Columbus, Ohio, has been building a national financial services distribution by acquiring independent advisory firms from their owners, and NFP says the increase in management fees is a sign that the strategy is working.

The increase in revenue going to management fees “was driven by a broad improvement in the earnings performance of NFP’s owned firms relative to operating targets,” the company says.

NFP says it has set aside $800,000 for sellers of advisory firms that do well during the 3-year post-acquisition period.

NFP has acquired a total of more than 135 advisory firms, and it completed 9 new deals between Jan. 1 and May 4, the company says.

The company as a whole is reporting $6.9 million in net income for the first quarter on $135.2 million in revenue, up from $3.6 million in net income on $97 million in revenue for the first quarter of 2003.

One possible cloud: New York insurance regulators have asked NFP for information about “placement service” compensation agreements with property-casualty insurers that do business in New York.

P-c sales generated less that 5% of NFP’s 2003 revenue, but “the ultimate scope and outcome of the [New York] inquiry cannot be determined at this time,” NFP says.