KANSAS CITY – The founder of the Garrett Planning Network says she is open to merging her low-fee firm or selling it to select financial services groups.

“I’ve opened up those conversations before with different parties,” Sheryl Garrett told Financial Planning amid her organization’s 13th annual gathering here.

“I know there are good-fit partnerships out there for us, whether it’s a formal partnership or a complete merger or acquisition," added Garrett, whose membership group of 324 planners target the “middle market” of potential clients by emphasizing hourly planning fees and no AUM minimums. "As I told our members, there are so few people or outfits that I believe we are philosophically aligned with that I don’t know who we would fit with.”

Nonetheless, she said: “Just for grins, a Vanguard, maybe a NAPFA ... if NAPFA were a business-run organization.”

She is also considering partnerships with organizations that focus on financial wellness. 

A Vanguard spokesman said: "The advisors and practices that we serve are wholly independent and we have no plans or intention of altering that nature of our relationship with independent advisory practices. That said, we have great respect for Sheryl and her network of advisors, as well as their mission to make quality financial advice more widely available to investors." A NAPFA official did not return a call seeking comment. 

FINDING THE RIGHT MATE

Garrett, 51, likened the process to dating. “We have this major philosophical challenge -- are we ever going to find someone? It’s kind of like someone who could date forever but never find the right mate," she said. "I would expect that ... we might date forever. We may never find the right mate because there may not be one.

"Possibly the best long term solution, post-Sheryl, is that the members own it,” she concluded.

There is one outcome that Garrett said she is not open to: “I do not want to be part of a publicly traded company. Period. The shareholder is the boss, and we can’t answer to the shareholder – we have to answer to our clients. No publicly traded company is going to be our option, that’s why Vanguard would be an excellent option, or a NAPFA. It would have to be a private group or some amazing benefactor,” she added.

MOTLEY FOOL BREAKUP

A few years ago, Garrett Planning Network had a relationship with Motley Fool -- and although that partnership has since been dissolved, Garrett said a merger was on the table at one point. She said she thought at the time, “You guys have a lot of intellectual capital, managerial and leadership, a training level, writers and marketing people and a president and managerial types and a legal department and all that -- which we could definitely use. We could also use money to put into place some of these technological solutions that are very enticing to many of us and have a lot more robust website and do more for our membership and the clients that we serve.”

But over time, she said, “We couldn’t make the cultures fit."

Like many businesses trying to grow -- membership in the network has largely remained stagnant for a few years -- Garrett worries about maintaining a strong platform to attract CFPs and CFP candidates who want a practice that isn’t overtly focused on driving revenue and AUM higher.

“If we don’t do anything very differently and just keep on keeping on, is that enough?” she asks. “Is that going to keep us relevant in the future? Or do we need to be doing some of these things that people are asking for and make us bigger and better and stronger? The general consensus is the more people, the more talent, to a certain degree, the more resources and energy and talent that we can share. We can barely touch the population needs if we added several hundred more planners.” However, she notes, “We wouldn’t want to -- while I’m still around -- get too big that we don’t know everyone.”

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