Company owner denies report but says he takes phone calls of outside financiers

June 27, 2011 — 10:18 PM UTC by Brooke Southall

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The Mutual Fund Store is not on the block, according to its owner.

The Overland Park, Kan. franchiser will continue to execute its ambitious growth plans under its current ownership, says Adam Bold, CEO and founder of the 15 year-old company, in an interview.

“I have not put the company up for sale,” he says. “Neither myself nor my management team are going anywhere.”

Bold made the statements after InvestmentNews ran an article citing an unnamed source who said that JPMorgan Chase & Co. is shopping the firm for between $300 million and $350 million. The Mutual Fund Store is an RIA with about $6.4 billion of assets, more than double of what it had at the lowest point in the market – $2.9 billion – on March 9, 2009.

Yet Bold, a former Smith Barney stockbroker, allows that he converses with various financiers and investors that could have an influence on his company as he seeks to double or triple its size during the course of the next five years.

Bigger numbers

“As the company has grown in size and national exposure, I’ve gotten a lot of calls from people who want an equity stake or to provide financing. I got calls 10 years, 10 weeks and 10 days ago and as a prudent person, I listen to these things….clearly the bigger the company gets, the bigger all the numbers get in terms of growing the business.”

Attention from outside investors relates to the company’s unusual ability to profitably reach the mass affluent investor, Bold adds. The average customer of The Mutual Fund Store has $200,000 in assets. The idea of a franchise for the mass affluent got a boost with The Charles Schwab Corp.'s plans of going that route. See: Schwab spells out the details of its franchise plan.

The Mutual Fund Store has about 70 franchises and is on track to add about 12 new ones this year and 24 next year.

Bold says he also plans to continue to do his radio show for national audiences, which is one of the big engines driving the business because it generates a stream of referrals much in the way Ric Edelman, the owner of Edelman Financial, and others do.

See: Radio-star RIAs drive giant growth at national chains one $400,000 investor at a time.

Yet he adds that his New Orleans franchisee, Scott Capace, has begun to occasionally fill in on the show.

“He loves doing it; he’s a younger version of me,” Bold says.

No pressure

Bold says he still thrives on doing the show but that he can use the occasional breather after doing three hours of radio, 47 Saturdays a year since 1998. He adds that having Capace serves as a good contingency plan were anything “God forbid” to happen to him.

Edelman was quoted in the same InvestmentNews article saying that he is getting phone calls from The Mutual Fund Store franchisees. Bold’s response: “I find that hard to believe; my franchisees have been very successful.”

Bold says he has communicated with his franchisees privately about the report and told them that is is “inaccurate.’

He adds that he’s been asked about whether his VC partners are pressing for a sale. “I have no pressure from them.”

As far as getting outside involvement in financing, he adds: “It’s certainly something to consider; I’m not ruling it out.”

Edelman Financial’s shares rose 60 cents or 8.11% to $8 today.

Edelman says he at first believed that his company’s share-price increase could be attributed to the big price quoted for The Mutual Fund Store in the InvestmentNews article. Subsequently, he found out that, coincidentally, a new institutional investor had begun accumulating shares on July 27.

Editor’s Note: The final paragraph was added subsequent to the article’s original publication.



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