It almost goes without saying. All independent advisors want their businesses to grow and outshine their competitors. How advisors achieve this common goal, however, varies. If you’re like Richard Mack, principal of Mack Financial Group in Indianapolis, Indiana, the best way to ensure that your firm continues to thrive is to join a consortium of likeminded entrepreneurs with whom you can network and share strategic ideas–someplace like M Financial Group.
When Mack became a member of Portland, Oregon-based M Financial 11 years ago, he was wondering whether to sell his firm or find more sophisticated methods to push his business forward. “Like most firms, you reach a certain point in your business where you outgrow traditional resources to help [your business] grow,” Mack says. “The choices [of alternative resources for growth] are limited,” and sometimes firms are forced to “sell out for some ridiculously low price.”
Like some other independent-minded advisors, Mack chose to link up with M Financial instead of selling out to a firm like National Financial Partners. The member firms of M Financial–independent insurance, investment, and executive benefits firms–are shareholders. But not all advisors qualify to be M members. Mack’s firm is a perfect candidate because his clients are among the nation’s ultra-wealthy, having a net worth of $10 million and up.
That’s the kind of firm M Financial is looking for, says president and CEO Fred Jonske. Of the 110 member firms at M, 90% of them serve wealthy clients with net worths in excess of $20 million, he says. The other 10% serve corporate benefits firms and Fortune 1000 companies. Jonske says firms must meet pretty strict requirements before they can join M. Firms must already be successful, he says, and be generating “in excess of $1 million in revenue” annually.
Firms must also “fit the image of what [M Financial] stands for,” which is high integrity and ethics, he says. “We’re looking for leaders” who will participate in the direction of the organization.
Dues for the first two years of membership are $25,000, with $10,000 of that going toward purchasing 10,000 shares of M Financial stock. During the first two years, firms are considered “provisional members” and are required to meet a production quota before they are considered full-fledged members, Jonske says. Firms are judged on either insurance production or assets under management. With insurance, firms must produce “$600,000 of commissionable premiums” in life insurance, he says; M Financial uses a “similar formula on the assets under management side.”
Mark Tibergien, partner-in-charge of the Securities & Insurance Niche for Moss Adams LLP in Seattle, and an Investment Advisor columnist, says firms like M Financial provide an “excellent way” for firms to learn from each other.
Planner Mack says he loves collaborating with his fellow members on different ways to beef up his practice. He gets the best pointers on areas such as administrative tasks and practice management–and not just from other members, but from M Financial’s staff of accountants, actuaries, and lawyers at the firm’s Portland headquarters. Jonske says members can brainstorm at a number of meetings that M Financial sponsors throughout the year. “If you ask member firms who their best friends are, they’d probably tell you it’s someone else within M,” Jonske says. “We have a tight-knit culture where people reach out to each other.”
First Insurance, Then Investments
M Financial (www.mfin.com) got its start back in 1978 when some leading players in the life insurance business decided to create an umbrella organization that could customize products for their ultra-rich clients. But nowadays, M Financial is a big distributor of investment products as well. “For the first two decades of our history, [M Financial] was focused on life insurance production,” Jonske says. But within the last 10 years, 50% of M’s member firms have migrated to the investment business, he says, “and more than 25 of our firms each have more than $100 million in assets that they manage.” M Financial is now being “approached by firms that are exclusively investment oriented.”