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May 20, 2019

Why is Your Firm Not Growing?
WealthManagement.com Memo

If we go by net new assets (and stripping out market growth), how much is your firm actually growing? If you look at most industry benchmarks, top RIAs are growing by more than 15%. If you are not growing by that amount, why not? This is probably the most common question leaders of firms ask Dynasty. What appears to be very common is that some firms are hitting a ceiling. They reach a particular AUM number and, no matter how hard they work, they are una [...]

Why is Your Firm Not Growing?

Top RIAs are growing by more than 15%. Does your practice measure up?

If we go by net new assets (and stripping out market growth), how much is your firm actually growing? If you look at most industry benchmarks, top RIAs are growing by more than 15%. If you are not growing by that amount, why not?

This is probably the most common question leaders of firms ask Dynasty. What appears to be very common is that some firms are hitting a ceiling. They reach a particular AUM number and, no matter how hard they work, they are unable to significantly break through. They are providing an excellent client experience, that is not the problem, so what is it?

The answer to this question will vary from firm to firm. It all comes down to a “TTPP Evaluation”: Talent, Technology, Process and Positioning. You will notice I have not mentioned Marketing, more about that later.

Talent

Never mind just having the right people on the bus, are they sitting in the right seats? If you are being brutally honest, how many advisors in your firm are actual rainmakers? I am willing to gamble that it will not be 100% and that is actually fine. Many successful firms have been built using advisors that are fantastic relationship managers but they are not good rainmakers and, if they are honest, the thought of it probably makes them uncomfortable. That is absolutely fine as long as two key factors are in place:

The people who are rainmakers have their workloads lightened so that they can go out and rain-make.
Advisors’ compensation will vary depending on whether they brought in the client or not.
Taking this to the next level, many firms use business development officers, whose sole focus is bringing in clients and handing them off. They have zero client relationship responsibilities and can be a key part in building a growth culture.

Lastly, what does your training program look like for the next generation of advisors? Too many firms have zero training programs for young advisors. What is even rarer is for a firm to have a training program on the most difficult aspect of being an advisor: bringing in new business. At Dynasty, we actually run training programs for young advisors that network firms can send their young advisors to. Finding the next generation of talent is one thing, but you have to enable it too.

Technology

Are rainmakers too busy to go out and rain-make? Technology can offer a great deal of relief. For example, Dynasty once worked with an RIA in Pennsylvania that had hit up against an AUM ceiling and could not break through. We found that this was due to the key rainmaker being tied up in the daily tasks of the client relationship. To alleviate this we worked to dramatically improved their technology package, so high-quality client reports now took seconds, instead of weeks, we then built a support “service pod” structure around the rainmaker, so he could still be the point person on the relationships, but daily tasks could be easily handled by a support team.

Process

Without question, the firms we see that grow the fastest always have two key things in common: they hold regular company-wide sales meetings and they have a clearly defined “prospect pathway”.

Sales meetings, where advisors walk through their pipeline, are absolutely crucial. Not only is it a good psychological tool (since an advisor has to regularly report back on their pipeline, it increases the likelihood of them actually filling it), but it also helps share ideas within the firm on what works.

A “prospect pathway” is the process that every prospect goes through at your firm. Right from the moment you meet someone in a social setting to them signing as a client, what processes do they go through? How does your firm reach out to them and what work is carried out? The fastest growing firms have a very clearly defined multi step process. This has so many knock-on advantages:

It helps maintain a consistent client experience between advisors.
It helps train up new advisors because they never have to ask “what is next”.
Prospects notice this clear structure to an approach and it helps paint the picture that the eventual client experience will be equally structured and thoughtful.
Positioning

The fastest growing firms also often have at least one very specific target client in mind. They then build a whole client experience and business development strategy around that ideal client. For example, the Dynasty Network firm Source Financial Advisors in New York is specifically geared towards independent women of wealth. They have built a whole service structure towards helping women go through a divorce and transition from “Wife to CFO.” They have become the answer to the question. If you ask a divorce attorney who you should see if you need help with your finances post-divorce, Source is top of mind.

Now, many advisors might respond that they do not have an ideal client and their client book is a good mix of backgrounds and occupations. I would wager that if you were to do an audit of their client book, you might not find similar occupations, but you might find similar personalities or needs. The advisor might not know it, but they are fulfilling a particular need for the client, what is that need?

The danger of not clearly identifying your value proposition is clear. How many times do we see an advisor take on a smaller client because they know one day in the future that client will have a liquidity event. Then, right before the client has the liquidity event, the client switches advisors. The reasons for that is the other advisor proved to the client that they had a specific capability of handling large liquidity events and the old advisor never did. He or she never proved their value proposition.

It is here, right at the very end, where we finally talk about Marketing. Many firms launch into marketing campaigns to help raise their growth. However, if you have not gone through the steps mentioned above, it might be dollars wasted.

Going through the ideal client evaluation mentioned first is crucial because that then allows you to decide between marketing strategies. Which marketing strategy is going to target your ideal client best? Where are they going to see or touch your strategy? If you already know your ideal client, then the marketing decisions become easy.

If you are questioning why your firm is not growing, do not immediately jump for the checkbook and spend on marketing strategies. Hopefully we have shown here that the answer is far more deeply rooted and your needs to have the correct talent, technology, process and positioning in place first. 

May 16, 2019

Wirehouse Ties Fray as More Advisors Seek Independence 1 Comment Post Comment

Ties binding wealth advisors to their big-bank wirehouses continue to show signs of fraying with teams managing billions of dollars opting to take the independent route or join boutique shops in recent weeks, Bloomberg reports. [...]

Ties binding wealth advisors to their big-bank wirehouses continue to show signs of fraying with teams managing billions of dollars opting to take the independent route or join boutique shops in recent weeks, Bloomberg reports.

Four private bankers overseeing about $530 million severed links with UBS earlier this week by moving to Dynasty Financial Partners to launch their Portland, Maine-based independent wealth manager, Great Diamond Partners.

 Five Bank of America advisors who managed $450 million in client assets in Atlanta left the giant bank last week. In Texas, Morgan Stanley lost a $6 billion team, as reported. All partnered with Dynasty, which says so-called “breakaway teams” now manage about $25 billion through its platform, Bloomberg reports.

Independent and hybrid investment advisors are expected to account for 28% of the market by 2020, up from 25% in 2015, Cerulli Associates’ data shows.

An “ecosystem” that supports advisors is key to increased movement, according to Tim Oden, senior managing director of advisor services at Charles Schwab. “Large complex teams require large complex solutions,” Oden tells Bloomberg.

Such an ecosystem now exists, thanks to outfits like Dynasty that provide trading platforms, products and back-office services.
 
Indeed, the new Dynasty teams “wanted the road to independence to be a little more well-traveled,” Dynasty CEO Shirl Penneytells Bloomberg. Advisors running large books of business aren’t “going to take a significant risk and hope it works out,” Penney says.

At Dynasty, independent advisors typically record 25% to 40% more in average cash flow than at big banks and “they own all the upside,” says Penney.

Technological advances that are “independent of the economy and market cycles” have eased some of the risk of going it alone, says Great Diamond founding partner Steven Tenney, who was at UBS for 26 years. Independence is “the best way to capitalize on that technology," adds Tenney.

A UBS spokesman declines to comment on the team’s departure.

Breakaway success hinges on clients sticking with advisors through the move. Advisors exiting large firms to create boutiques retained an average 87% of their client assets, according to a Schwab survey, Bloomberg reports.

 
Boutique firms such as Rockefeller Capital Management are also beefing up their advisor rosters. Rockefeller has attracted teams from Bank of America and UBS in recent months as it continues to grow, Bloomberg notes.

May 14, 2019

#FASuccess Ep 124: Insourcing Vs Outsourcing To Manage Overhead Expense Ratios While Scaling An Advisory Firm, with Shirl Penney
Nerds Eye View

My guest on today’s podcast is Shirl Penney. Shirl is the co-founder and CEO of Dynasty Financial Partners, a back and middle-office service provider for large independent RIAs that has more than $32 billion [...]

Full Transcript:
Michael: Welcome, Shirl Penney, to the “Financial Advisor Success” podcast.

Shirl: Thank you, Michael. I’m excited to be here and congratulations on your impressive success of the podcast.

Michael: Thank you. It’s been a heck of a run now. We’re over 120 episodes. We’re actually going back and looking at our stats. We’ve had 2 million downloads of the podcast over the past 2 years, which kind of blows my mind for how many people are listening and listening regularly on an ongoing basis. But it’s been a heck of a ride. It’s pretty fun just as a medium to, I don’t know, I like it. I just get to chit-chat about the business. I love talking about the industry. I’ll talk shop until the wee hours of the morning. And I just get to do that with cool people throughout the year. It’s been pretty fun running the podcast for a while now.

Shirl: I bet. Like I said, I’m excited to be a part of it. And I’m also kind of a student of the industry, if you will. So I’ve certainly listened to a number of your podcasts and constantly reading about the industry and trying to apply that on behalf of our business here at Dynasty, but also take a lot of those learnings and apply it with our clients, the RIAs that we cover around the country. So this should be a fun and exciting conversation. So let’s get after it.

Michael: Yeah. I’ve been looking forward to it. We’ve had a kind of theme over the past couple of episodes in particular of talking about some people who are in or have built larger advisory firms, as well as folks that have built what I would essentially call support platforms for advisors. And to me, it just gets at this choice, this crossroads that I suppose any business has to some extent, of, for any particular thing you’re going to do, do you want to do that yourself or in your business or do you want to outsource it. And the rise of platforms like yours, like Dynasty, where, I think we used to think about outsourcing in like particular very finite functions like, okay, I need to do the downloads and reconciliations for my portfolio center, do I want to do that internally or am I going to outsource that? Or like, hey, I need someone to do the occasional logo and graphic design for one of my marketing materials, do I want to hire a marketing graphic designer person or am I just going to outsource that to a freelancer?

But I know what you guys are doing and some of the platforms that have come up over the past 10 years, to me, take this to a whole other level where suddenly the discussions like, “Hey, how do you feel about just outsourcing virtually the entire overhead portion of your business? The whole mid and back office goes back out to a platform while you continue to do most of the client-facing activities.” Which to me, well, both ironically and sort of I think to the point of your business model, kind of recreates the captive employee advisor of old. The original wirehouse-style model was we do all the back-office and mid-office stuff, you’re the advisor and your role is just to be seeing the clients and seeing the clients and it’s all you do. Just go do the clients and we’ll do all the back-office and infrastructure. But the caveat in that environment is it was also literally the firm’s client and you were, well, legally representing them. That’s why we put “registered representative” on our business card.

And so now we have sort of this alternative world where instead of saying it’s their firm and their clients and I just fulfill this client-facing role while they do the rest of the mid and back office, now it can be my firm and I own it and I get to control it and set the vision in the future, but I can still basically outsource all of the mid and back office like it was in the, call it the model of old, and do all the client-facing stuff, but the locus of control has shifted that now it’s my firm and I’m an independent. And I think part of the way that lines up so well, to me it makes a lot of sense then that firms like yours have had such success in the wirehouse breakout model in particular. They go from a supported model where they’re client-facing and a firm does the back-office to a supported model where they’re client-facing and the firm does the back office, but the whole ownership and control change in the process. Although now I know you’re getting broader than just people breaking out of wirehouses.

So talk to us a little bit about the Dynasty model, what you guys do and how you think about this framework or position yourselves with advisors.

How Dynasty Financial Partners Supports Advisors [07:51]
Shirl: Yeah. No, happy to. And I think you nailed it in terms of where the business has come from in the evolution of the RIA space. And I’ll touch on that. The real genesis for the original vision for Dynasty to provide that turnkey middle-office and/or integrated platform support for an RIA started I would say north of 15 years ago back when I was at Smith Barney and I had a number of different roles but helped build and run the Private Wealth business, their ultra-high-net-worth business.

And I remember leading a presentation to senior management of the company about putting together a business unit that would provide services, product and services, to RIAs, because we were watching very closely the asset flows within the business and Smith Barney at the time had a great franchise and we were winning consistently versus the other brokerage firms. And the private bank, Citi Private Bank, which was under the Citi umbrella as well, was doing just fine also, but you saw an acceleration of assets transferring out to the RIA custodians. And there was a little bit of…

Michael: This was early-stage RIA, right? This is early-mid-2000s?

Shirl: Yes, this is back in ’04, ’05. That’s exactly right. But there was enough asset transference that you could see a trend starting to develop. And we went in and presented a business plan that was probably, not probably, it was just too early, kind of ahead of its time, if you will, but said, “Why don’t we not think about this RIA space as perhaps competitors, because ultimately what we’re starting to hear…” My career I’ve spent a lot of time with end-clients, with all the advisors that I’ve been fortunate enough to work with, and I was starting to hear them say things like, “I think I want to get more of my advice separate from where products are manufactured and sold.” Right? So again, not necessarily talking about suitability or fiduciary and some of the terms that we use in the industry, but just simply thinking about advice separate from where products are manufactured and sold.

So you could see even back then kind of the writing on the wall in terms of the acceleration of the lifeblood of our industry, which is assets, making that move towards independence. And this is obviously before the financial crisis. And we made that presentation and basically, the firm was afraid of cannibalization, that if we’re empowering and providing capital markets support, separate managed account, alternative investments, credit, ultimately custody, etc. to the RIA space then what’s going to stop our advisors from walking across the street from the branches of Smith Barney and starting their own RIA? And I think frankly, even 15 years, fast-forward, a lot of the wirehouses and brokerage firms that have considered getting more involved in the RIA space are still struggling with that same issue.

But anyhow, as I started to look more at the RIA space, I went out and interviewed 30, 40 different large-scale RIAs all around the country, and what they said is, and many of them had been early-stage movers to independence, early-stage breakaway, kind of rugged individualists, pioneers of the breakaway movement, they would say things like, “The custodian does an incredible job providing all the back-office services.” But I didn’t fully appreciate the fact that the skills that make me a great advisor may not be the same skills that now make me a great CEO. And the transition from advisor to CEO has been a challenge because now I have to hire all these people to provide all of the middle-office support for my firm, to your earlier point, Michael, that I used to get back at the brokerage firm, and there’s all of these different vendors that are out there and I’m juggling 45 different vendor balls. A lot of it doesn’t integrate. I’m spending a lot of money on variable costs within the business with all of these things.

It would be nice if there was a platform out there, an advisor desktop that I could log into and get all the things that I need to run my business but without having to sell my business, right? I don’t want to join a roll-up. And the roll-up movement had just started back 15 years ago or so, and a lot of the only ways that somebody could get kind of supported independence, if you will, is to go independent and sell at the most costly time, for people who were growing their business rapidly, at the point of transition and lose a lot of the upside. So the light bulb kind of went off and said, “Look, why don’t we start the industry’s first truly integrated middle-office platform service company that can allow an advisor to be independent but not alone, to be in a community, to have all the resources that they need.”

And if you think about the custodian, the back-office, the advisor in the front office providing the day-to-day client service for their clients, why don’t we enter into the market and build this firm, Dynasty, to provide all of the things that connect the back office to the front office, that can provide synthetic scale. Because if we build out an infrastructure and a technology and a team that can spread the cost and spread the need across multiple RIAs, in aggregate $20 billion, $30 billion, $50 million, ultimately $100 billion of aggregate buying power, it’ll drive a lot of scale and efficiencies that will benefit those underlying advisors as well as the clients that they serve. And that started the journey to go build Dynasty. So I left Citigroup in April of 2008, sold my Citigroup stock in the low 30s, which was very fortunate because 6 months later it was 80 cents.

And the challenge, though, was, now I’m out raising capital for this new model that no one had ever heard of in the height of the financial crisis. So my wife kept track, she’s the real co-founder of the firm, of how long we went without a paycheck, two years, seven months, and four days. So we officially launched the business in December of 2010. And it took a little bit of time. Probably the first couple of years was a lot of education of the marketplace that we’re not a roll-up, we’re not taking equity from the RIAs that are our clients, but we are a service provider. But once the market figured out what it is that we’re doing and the value prop, we were kind of off to the races. And today we have 47 firms that are on the platform, which we can talk a little more about if you like, but in aggregate today north of $32 billion of assets that sit on the platform and a very steady forward growth projection of the business that I think in the next 3 or 4 years should get us pretty close to the $100 billion number.

Michael: You made an interesting point there as you were getting launched and kind of figuring out how to explain your positioning that, as you said, you’re not a roll-up. Right. So that starts to distinguish with I guess what at the time would have been firms like United Capital, now some players like Mercer and Focus. You’re not taking equity as, at least at the time, as HighTower was, where that was part of the deal.

That you were positioned as a service provider, as, I was going to say simply a service provider. I don’t mean that in the belittling way that maybe it sounds to say simply a service provider, but just that there was…your positioning, to me, had sort of a certain simplicity and purity of the relationship of what you were doing that it was just, “Look, you run your firm, we’ll be a service provider for you, we’ll handle all that whole slew of middle-office functions that you don’t necessarily want to do or hire up for. It’s a pain in the butt because you need a third of a person to do this, but you can’t hire a third of a person, so you have to either hire a freelancer, who’s not that focused on your business, so you have to hire one person to do one third of their time in three different jobs, which means you don’t get a great person. And we’re just here to be that service provider for all that middle-office stuff that it’s really hard for firms to deal with until they basically get their own billions of dollars of scale.”

Shirl: Yeah, that’s exactly right. And look, our business has evolved, like all businesses do. So we’re coming up on our ninth year since the launch, and the services that our clients needed when we first launched the business is different than the services that our clients need now because a lot of them are more mature. A lot of our clients now are not breakaways, they were already independent firms that wanted to come in and outsource more of the infrastructure to us so they can focus more time on growth and more time taking care of their clients, etc.

The Four Key Service Lines They Offer [16:56]
But our service platform now can be fairly easily broken up into four buckets. The first is a consulting business. And if you think about all the various life cycles of an RIA, to oversimplify it, we provide consulting to someone who’s breaking away and launching a firm. So there’s a whole set of project management services that have to be done around launching a firm regardless of where they’ve come from. And Michael, at this point, we’ve done breakaways from basically every firm in the industry, every type of firm, whether it be wirehouses, banks, IBDs. We’ve done breakaways from roll-ups, we’ve done breakaways from other RIAs that have scaled up and the partners aren’t getting along for whatever reason. We pretty much set up an advisory firm with advisors coming from any potential avenue that they could come through in the space. We also within that…

Michael: Sorry, I was just going to ask like, and so in that consulting services, this is just a lot of like, how do you do this transition? Legally, what are the entities? What are the structures? What’s your employment agreement? What are you allowed to do? What are you not allowed to do? Just, how would you make the transition? What has to be created on the other side? And then just the project management and, I guess, transition support that goes with executing that and not screwing it up, since most advisors have never actually done that transition until you have to do it the first time, and it’s kind of high-stakes at the moment?

Shirl: Yeah, with your life’s work on the line. That’s right. I describe it as kind of the Staples Easy Button around the transition. We’re the general contractor helping you build the new house. And we’ve created our own proprietary project management software which helps with confidentiality but also helps keep all aspects of the project organized. And we literally do everything from finding the office, negotiating the lease, helping to secure any type of liquidity that they need around the move, the naming, the branding, the logo, the launch videos, the launch letters, the new account paperwork, the LLC, the partnership agreements, setting up board of directors if that’s needed, equity splits, on and on and on.

And then we live with the advisors through the transition, helping to make sure that all the paperwork is getting done. Oftentimes with large clients, we might go out and sit with clients, with the advisor to help explain the new model. So we’re very, very engaged. So it’s not like a traditional consulting firm where it’s more just guidance, but we’re providing the guidance and then jumping in the trenches with our client and helping them execute.

So the breakaway piece is a big part of the consulting business. As I mentioned earlier, advisor to CEO, so a lot of practice management and coaching around how to grow the business, whether it’s inorganic, adding other advisors. A lot of advisors we find say they want to grow inorganically but they’re not sure how. So you have to get the right equity structure, comp plan in place. They have to have the right marketing materials, PR strategy. And we help them design those programs.

And then obviously the third life cycle is succession. And we do quite a bit of succession planning for advisors in the network. But given the average age of an advisor in the Dynasty network right now is late 40s, they’re still in rapid growth mode, so a lot of the succession work that we do is tied more to advisors that are coming to us looking to sell their firm into one of the underlying firms within the Dynasty network. So that’s the consulting piece.

The second business is our, we call our core business. And you really summed it up nicely earlier, that’s running all the middle office. So rather than an RIA that might be listening to the podcast, rather than them having to juggle the 45 different vendor balls, they have an integrated experience with us. So they don’t have to go contract with a financial planning software provider or a CRM or worry about a proposal generator or think about where they’re going to get compliance support from or who’s going to do their billing or their reporting, etc., etc. We’re providing all of that as a turnkey middle-office service provider for them. So they don’t have to hire people to do it, and they don’t have to worry about negotiating any of those third-party vendor contracts.

And we were one of the first kind of players, going back nine years ago when we launched the business, to really build an advisor desktop with a focus on open APIs. So we built our chassis to be very flexible so that as a new best-in-class service provider comes along, I think about it as kind of that high-end iPad for the RIA space that allows for us to trade in new apps as they become available and needed by the client RIAs that we serve. So we charge percentage of revenue or basis points for all of that turnkey middle-office support. It typically ends up being around 15%, give or take, as it blends out. The average firm on our platform is about $600 million. So it does scale down. So you get the benefit of scale. As one of our clients grows, they’re paying less and less to us on behalf of their variable expense on a percentage of revenue basis.

And then the last business for us that we launched with was our platform service business. And the term you typically hear in the space is a TAMP, turnkey asset management provider. So we have built out a TAMP to provide SMA, UMA, advisor as portfolio manager trading functionality and toolkits, alternative investment with access to various feeder funds, capital markets, investment banking, access for advisors that want to make referrals to invest in banks, etc. So we actually just hit $15 billion on our TAMP, which I think makes us one of the top 5 TAMPs that’s in the RIA space. So we’ve had a lot of success in terms of growing assets with advisors that have a consulting approach that are outsourcing to professional money managers. And the rest of it, to the $32 billion, the rest of it sits in more APM, advisor as portfolio manager programs where we provide a lot of street-wide access to research and trading tools and technologies to help those advisors run scalable and efficient portfolios.

So those were the three businesses we launched with: the consulting, the core business, and platform, but what’s happened as our firms have matured, they’ve needed more access to capital. So a couple of years ago we launched a new capital business, which is now our fourth vertical, where we provide loans to our advisor clients to provide liquidity for principals to fund succession planning or to fund MNA. And we have quite a sizable loan book already that we’ve deployed for our community.

And then most recently, and I did hear that Michael Henley, when he was on your show, was talking a little bit about this product, but we launched what we call a revenue participation note, an RPN, where we will buy up to 10% of the revenue in an advisor’s firm, which provides some very tax advantageous liquidity for those principals if they want to take the money out of the business without having to give up any controls. And that product has really been something that’s taken off for us for advisors that say, “Look, I want to sell my business 10 years down the road, but I want to take a few chips off the table now. So let me get some liquidity, sell a piece of my revenue.” And then after five years, we allow for flexibility so that if they change their mind and say, “I want to buy it back,” they can. So it’s only permanent capital for the advisors if they choose, they have a one-way right on their side to have it be permanent capital.

So anyhow, that’s the business model now with a community of like-minded principals, a couple hundred advisors across these 47 firms that love to get together, talk about best practices, collaborate. There’s some partnering that goes on with different types of businesses. So to provide this supported independent model, as you suggested, I think about it as scaffolding around the firms or providing the synthetic scale that they need that allows them to be very competitive at the ultra-high-end of the market when they’re going after an ultra-high-end client.

How Their Loans And Buy-Backs Work [25:42]
Michael: So I’m curious just a little bit more around this lending capital business and particularly the revenue participation note. So can you maybe just, I know it’s always hard talking the math on a podcast in audio, but can you walk us through just a little bit of an example of the mechanics and how this works? I’m just trying to wrap my head around quite like, how does the math work and why do I do this and what kind of liquidity do I get from it if I’m doing it?

Shirl: Sure. So if you’re an RIA and you’re generating $3 million of advisory fees, we are willing to purchase up to 10% of your revenue, right? So pretty simple math is $300,000.

Michael: So you’re going to buy $300,000 a year of my top-line revenue. I guess technically, you can draw it on profits, but you’re just drawing it straight off the top line. That’s the deal. So 10% of my revenue goes to you, I keep the other 90%.

Shirl: Yeah, and because we run all the billing and we take a lot of that middle-office work off the table of the RIA. So we’re running the billing, and now we’re further incentivized, if you will, to help the firms grow, because the better they do in that scenario, obviously the better that we do. But in this case, $300,000. We pay 6 times the revenue interest. So $300,000 with a 6 multiple is 1.8, right? So we’re buying 10% of the revenue in a $3 million revenue RIA for $1.8 million.

Michael: Which is a huge number by traditional advisor multiples of selling for two times revenue. But of course, the reality for most firms, we don’t really sell for two times revenue, we sell for, if you’re a sizable firm, maybe six to nine times free cash flow. So from your perspective, when you buy the revenue but it comes off the top, it’s essentially 10% preferential profits interest for you. So you can pay a normal multiple of cash flow, which is how you get to 6X?

Shirl: That’s right. And another way to think about it, too, Michael, is if you’re at…the average advisor on our platform, we can talk about gross margins and net income and what we’re seeing in the advisory space and some trends and things that might be interesting to your listeners, but the average net income, if you will, of an advisor firm that sits on our platform is about 30%. And that’s after all of their fixed cost and variable cost, and it’s after advisor comp.

Now, they own the equity, so most of the advisors are paying that out as a dividend to themselves, but if you think about net income at 30% and then Dynasty comes in and buys 10% of the revenue, we’re buying about a third of the profits, right? So we never want to turn an entrepreneur into an employee. So the majority of the profits for them is still on the table. So the positive selection bias, which really works in our favor, which is, we want to support advisors that want to own the vast majority of their equity because they see their best growth years in front of them, we can come in, give them a little bit of liquidity, cloud them to get some chips off the table.

Now, follow this case forward, that $1.8 million goes into the business. And if they decide the principal wants to take the money out, they simply put a loan on the books, right? So they borrow the money from the business. They pay a nominal interest on it, which they’re paying to themselves, which would be the equivalent, for most high-net-worth advisors are in a tax bracket when you look at state and federal of close to 50%, that would be the equivalent if they took an upfront deal from a roll-up on one of these forgivable loan deals or if they took a deal from another wirehouse of a number that is twice that $1.8 million. That’s the equivalent of $3.6 million in a traditional upfront deal because of how it’s structured from a loan perspective and the tax advantages around it.

So it’s been met with a lot of enthusiasm. We don’t take any control. It’s a straight revenue interest. It’s not tied to us having any managerial oversight. Obviously, we’re providing compliance support. We’re providing outsourced chief financial officer-type supports. We make sure that they run a good, clean business, but we’re not in any way dictating how the advisor does so.

Michael: And so, I’m going to imagine in practice you really get a blend, some people that do the partial liquidity and just literally keep the money and they’ve taken some profits off the table, they’ll grow it further over the next 5 to 10 years and then have their final liquidity event at the end. And I’m presuming some use this as growth capital instead? They take the dollars and they plow it right back into the business like, “Hey, $1.8 million of cash, so I’m going to hire the 3 more people I wanted to hire and I’m going to do a bunch of these other things that I wanted to do now that I’ve got the opportunity to do so.”

Shirl: Yes, although they don’t…not so much in terms of hiring people. Occasionally it happens, but a lot of that middle-office service, again, is being outsourced to us. But what more and more people are doing…

Michael: Oh, good point. They don’t need the growth capital, they already have. You’re scaling it for them.

Shirl: But what they’re using it for is M&A capital and really see seeing it as kind of a permanent line where every time they go out, let’s say they want to add another $3 million RIA, they know that we’ll step in and provide $1.8 million of additional liquidity because we’ll continue to buy 10% of all of the revenue of all of the ongoing acquisitions, right? So if you look at that in addition to a traditional two or three-year earnout, which is using in part cash flow from the business that you’re acquiring, with Dynasty putting the upfront money, it’s pretty easy to see how you have a nice systematic program to fund M&A on a go-forward basis for a lot of our clients.

Michael: Interesting. Interesting. And likewise, I guess that’s why you’ll only do a revenue anticipation note up to 10% because if you go too much higher than that, either you’re chewing up too much of their profits that you can change their mindset or just you get to the point where if there was a significant market downturn or a pullback in revenue, your actual cash flow might be impinged, which is not good for anybody in this deal.

Shirl: That’s exactly right. We do not want to even get close to buying even half of the profitability in one of the firms because we really want people to continue to be focused on growth.

Michael: And then you mentioned there’s this structure down the road where they can, I guess basically, buy their participation note back, unwind this, say like, “Hey, used the money, got bigger, feel good, want my equity back now.” So how does the buyback work on the other end?

Shirl: The buyback works at the same percentage rate. So it’s 10% of your then revenue. So if we’ve grown the revenue together then obviously we’d be a beneficiary. What we don’t benefit from, though, is it’s the same multiple. So if you’re significantly growing your business, the reality is the multiple tends to go up as the businesses get bigger. You’re still buying it back from us at the six times multiple. So that’s advantageous to the entrepreneur that takes the deal with us, as is the fact that it’s flexible to them that they can choose to do it or not.

Most typically what somebody would do is, let’s say they decide to sell the business down the road, and we’re having some conversations now where our network has gotten so large, and this won’t surprise you, is that some firms within our network are now, as part of their succession plan, planning to sell to other advisors within our community. Makes sense. They use the same systems and they’ve gotten to know each other and built trust over the years. So when that happens, they’ll execute the transaction, which we may finance the other side of it, but then they’ll close out, they’ll buy out our RPN at that point and then transition the business over to the acquiring RIA.

Michael: If they do this, if they do the buyback, sort of imagining the irony here: when I give you 10% for $1.8 million, it’s like, “Thanks for the pile of cash” and I go and do it for some M&A and other stuff. But then when I come back to you and hopefully my firm has grown, so now 6 times my profit interest is $2.5 million or $3 million, I don’t necessarily have $3 million of cash sitting around to buy it back because I’ve been deploying that in my business. So I’m sort of imagining the irony like, is there another layer now where I can buy back my revenue participation note but you’ll finance that purchase for me or do I have to wait for a final liquidity event so I can actually come to the table with cash?

Shirl: No, we have had scenarios where people have asked us to finance for that need. And I will tell you, we have a number of clients that do both. The loan book, personally guaranteed, and there are some benefits in terms of costs with the loan, but some people just don’t want to personally guarantee, especially in some scenarios where there’s a group of partners within the firm whereas the RPN is tied straight to the business. And then some people say, “Look, I have…whatever the need is, I’ve got a couple of million dollars of liquidity need, let me take $1 million in loan and do $1 million in RPN and mix and match it.” And we’re very flexible in that regard.

Michael: Interesting. So the RPN version is solely tied to the business. You don’t even require a personal guarantee because the business cash flows are the collateral when I guess you’re basically a 10% loan-to-value, so you’ve presumably got some good security.

Shirl: That’s correct.

Michael: Interesting. And I’m just wondering, from the business end, is this literally Dynasty now keeps its own proprietary loan book of all of these different succession loans and M&A loans and revenue participation notes? Is that actually becoming part of the business itself? You’re essentially a portfolio lender to your firms?

Shirl: It is. And we haven’t kind of proactively gone out and talked a lot about it in the press because we haven’t made the decision to open up, we call it Dynasty Capital Strategies, and it’s a subsidiary of the business, which is both the lending business as well as the RPNs. We’ve only allowed that liquidity in both of those programs to be deployed to our broader clients, right? So somebody who hasn’t been able to come to us and say, “I just want a loan.”

But the reality is Dynasty actually is one of the largest liquidity providers in the RIA space. When you look at the number of loans that we’ve put on the books over the last five years and the number of RPNs that we’ve put on the book over the last couple of years, collectively, we’ve provided tremendous amount of liquidity. I would tell you that 75%, so the majority of the advisors on our platform have used 1 of those 2 programs. Some people haven’t, they’ve self-financed or they were already independent when they signed up and haven’t needed liquidity yet for whatever need they might have. But most of, like I said, 75% have used one of those programs at some point in the life cycle of their business.

Michael: Fascinating.

Shirl: It’s very friendly capital, right? It’s your service provider that allows you to have capital when and if you need it.

Michael: And you intimately know your firms already because of the function of what you’re doing for them. So at worst you have very intimate knowledge to underwrite the risks effectively. And I guess with things like revenue participation notes, when you literally do their fee billing, you’re kind of pretty sure you can get paid because you actually handle the money. So you don’t have to worry about firms trying to run with their own revenue and not pay on their note because you actually fulfill that function for them with the core business. So just, it aligns very cleanly, right? It’s the same reason that custodians can handle those functions.

Shirl: That’s true. Look, if you look at our board of directors and people like Harvey Golub in American Express or Todd Thomson, who was the CFO of Citi, and Bill Donaldson obviously, founded DLJ, the SEC, etc., you kind of go down the line, we have run the business in a very professional, tight way ever since I left my garage, literally, in launching the business. So on the credit side, I can tell you our philosophy has been to underwrite the loans, and then on the RPN, to do the work there in a zero-loss-type mentality. And kind of knock on wood, if you will, we’ve never had any issues with any of the clients. There’s not a middle market commercial bank in America that wouldn’t want the credit quality of our advisor network and the work that we provide. And that’s not lost on us, and that’s why we’re able to provide pretty cost-effective capital.

You think about a breakaway, this is a new LLC with no revenue history where an advisor is transferring their client relationships from a firm that fundamentally believes that they own those client relationships, yet we’re standing behind those people in that new firm to provide liquidity for their staff and for their family in that time of transition. And we’ve been able to do so now for nine years with no losses. It’s to your point, we’re very careful. We get behind people we believe in. We run the books and records. We understand the compliance aspect of these businesses, and we’ve been very successful as a result of that.

Michael: So I’m thinking about Dynasty, as you said, around these four sort of core buckets. So consulting services, as you put it, the core business, which is all those middle-office functions, the platform, which is sort of the…is functionally the investment platform, so TAMP offering, access to SMAs, UMAs, all of these different strategies that become available, and then the Dynasty Capital Strategies, sort of the lending business when you need to get liquidity for your business tied to your business: supporting succession, supporting acquisitions, etc. And so, those are the four buckets: consulting, core, platform, and capital.

Shirl: You nailed it. And I think something that is worth clarifying as well is that pretty much everyone has hired us at some point to do some type of consulting work, but the consulting, the capital, and the platform business, they’re all a la carte, and somebody can choose to use them or not, but everyone who’s on the platform is a core…to be a client of Dynasty, if you will, that means that at a minimum, you are a core service client. We are running the middle and back office and providing a lot of the scale that we’ve talked about. And then on top of that, if you need coaching and consulting, if you need various types of capital or if you need access to an investment platform, then on a la carte basis you can opt into that. But everyone is a core client.

The Typical Gross Margins Of Firms That Leverage Dynasty’s Core Services [41:28]
Michael: So now talk to us, we’ve talked about the services side of the stuff that you do and across the four different service lines, so now bring us back again to the discussion about cost. So you said we can kind of think as maybe at least a rough benchmark. I realize it’ll scale up and down inversely with assets and revenue but something in the neighborhood of 15% of revenue for a firm with $600 million of assets is at least a starting point of how I can think about this from a revenue and a P&L perspective.

Shirl: Yeah, that’s right, it’s in that range. So if you think about the typical firm, and it varies because fixed costs can be different depending upon where the advisor lives and operates the business obviously, but the typical firm on our platform is running in the low to mid-60s in terms of gross income, and the average being actually about 63% right now. Meaning if their fixed cost, which oversimplifying, as you well know for an RIA, typically is their staff and real estate, right, those are biggest items, usually run somewhere around 17.5% to, call it 22.5% type range. Their variable costs, if they’re on their own, are those 45 different vendor balls that we discussed earlier, or if they’re working with Dynasty, it’s just us being because they don’t pay an additional fee for reporting or financial planning software, whatever it might be. That’s all included in our cost because we’ve gone out and put in place institutional pricing models with all of those service providers.

And in so far cost is in that 15% range, you add the variable cost, and most typically, as you also know, the custody costs are passed on, the execution costs are passed on to the end client. Although we do negotiate on behalf of our entire network favorable custody pricing and structural relationships with the custodians, but assume that that’s passed on. So the fixed cost plus the variable cost is somewhere in that 35% to 37%-type range so that their gross income, the RIAs that we’re supporting, is in that 62% to 65% range.

What most of them then do is they set advisor comp at, call it 35%, and then the rest of it comes out as a dividend, because most of the firms, again, larger firms that we support have more than one partner, and then the dividends are paid out on a pro rata basis based upon their equity participation.

What we have found, we actually did a study recently with John Furey, who I’m sure you’re familiar to, very respected consultant in the RIA space, and we looked at a lot of his larger client relationships, RIAs that he’s working with. We looked at the top advisor studies of some of the RIA custodians. There’s some asset managers that have put out top advisor studies. And then we looked at advisors that were coming to us that were already independent before they signed up and we found on average, top RIAs in the space were running at 55% versus our average is 62%. So it’s 700 basis-point differential.

And when you peel the onion back, what you find is, while we are saving these RIAs a little bit on third-party vendor cost or what we call resource partners, we don’t use the term “vendors” internally because we feel that partnerships are sustainable over a long period of time, and just treating somebody like commoditized vendor relationship is not. But our resource partner cost, we’re able to save a little bit, but where the real delta is, is on cost of employees, headcount, where our firms on average have 3 fewer people than comparable $600 million RIAs that are not on our platform. So when you take that delta on cost, let alone the amount of time that it takes to manage those people, the result is 700 basis points of higher income. So the advisors are making more money on our platform. But then if you say the average firm in our network has an 8 multiple, let’s say in terms of valuation, times 700 basis points, it’s an increase of almost 30% of valuation in the underlying firm, and they’re growing faster because they have more time to grow.

So once RIAs that come in and look to outsource to us really dig in and we do a robust P&L analysis to see where we can…we build a gap analysis and say, “Here’s where you are, here’s where you want to go, here’s what it looks with us,” we’re finding actually some of our happiest clients because they’ve already seen the movie of what it’s like totally on their own, or the ones that were already independent are now outsourcing more to us to free up their time to grow.

Michael: Well, and again, we touched on it earlier but I think it makes the point so powerfully here this challenge that a lot of firms get into. And I find this particularly hits us as you’re trying to scale from probably $300 million-plus up until you’re well over $1 billion, where you start to need all of these much more specialized roles. The path from a couple hundred million up to $1 billion is the path where your generalists start becoming specialists. You don’t have an advisor who’s the advisor and the chief investment officer, you get an investment person. You don’t have the advisor who also does marketing on the side, you actually get a marketing person. And you don’t have one person who does all the technology fixes in their spare time between seeing clients, you get a technology person.

And so the challenge, I think, for so many firms going through that transition is you end out hiring people to fill these roles but you don’t necessarily really actually need a full-time person’s worth of time in some of them, you just need more than the part-time that the senior advisor has available to give. And so you end out hiring lots of whole people where you probably would have been fine with partial shares of people. But it’s really hard to get high-quality part-time freelancers, but it works a lot better when you’re getting essentially variable cost, fractional services of a large aggregated platform. Which I think is why offerings like Dynasty and some others that are in the space work well. It becomes a way to partially lease an expert’s time as an in-between of just getting a freelancer off the street and hiring a full-time body when you don’t necessarily really need a full-time body.

Shirl: I think that’s very well said, and that’s what we’re talking about with synthetic scale. Absolutely. And I think, and you probably would remember who it was, but one of your guests on the show I remember at one point saying, because it really stuck with me similar to what you’re describing there is they said they realized they didn’t make any more money from when they had $300 million under management to $1 billion. And the reason is all you…what you just described is they had to hire more people, take on more technology and service providers, and the cost infrastructure didn’t get to a point for them to where they started to get some leverage back in the model until they got over $1 billion. And by working with a firm, as you say, like Dynasty, you can get that leverage in the business much sooner.

What Dynasty Does For Its Clients [49:07]
Michael: So help me understand in maybe a little bit more detail on the core business of just, what does Dynasty actually do for me in the core business and then what things do I still need to hire? As we’ve said, your firms are running this 35% to 37% overhead cost before they get to their gross margins. Your cost is about 15% of revenue, so there’s still a big chunk in the overhead category that I’ve got to deal with myself before you get the rest. So can you walk through with me a little bit more like just, what exactly do I get in core business services from Dynasty, and then what things are still ultimately on my plate as the advisor, either because it doesn’t fit in your model or just it’s something I would probably want to control over anyways? How do I carve up the list in a little more detail of who does what?

Shirl: Yeah, the most interesting part of your question was what you said right at the end, which is what I’m interested in and what I want to do, and that varies from client to client. We have some clients literally that say, “We want you to take everything and all we want to do is talk to the end client,” where they hire us as OCIO, so we’re doing portfolio construction, asset allocation, manager selection, trading, rebalancing, providing monthly commentary for the advisor, jumping on quarterly calls meetings with the client and then handling all the middle-office infrastructure on top of the investments. And then there are other people who say, “I just want you to handle my middle-office operations. And I actually enjoy the money management aspect and I want to just take your technology and your trading tools and I’ll manage it myself.”

But the things that are very popular, the things that I would say pretty much every client that we have would say that they really like getting from us would be things like marketing support. To your point, we have a guy who runs marketing for us, Gordy Abel, who was head of industry at Google before we hired him in financial services, brilliant, brilliant marketer. And he has a team under him that help advisors think through things that oftentimes they never thought about before like search optimization, right? Making sure that you’re on page one of Google when a client is searching for financial advisor or understanding digital marketing and how to use various tools like LinkedIn and other social media avenues to get your message out, how to use very simplistic AI technology that can really provide a lot of the front-end interaction to help build a scaled digital marketing program. We run all of those programs. So the advisors we support don’t have to worry about, “Hey, did I go and post on LinkedIn today or did I follow up on that lead?” So we have a team that’s running those programs.

On the compliance support side, somebody, as you know, within the business has to ultimately be responsible on the compliance side, but we make it color by numbers. So we have our own software that provides kind of a turnkey solution to help that person who’s responsible for compliance make sure that they’re doing all the things that they need to do, including us coming in on an annual basis and doing mock audits. Our general counsel was the GC of Lehman Brothers, general counsel, Barclays. He ran up SEC and FINRA group for a large law firm, and he has a whole compliance team under him that’s providing all of that type of support to really make it color by numbers to help design a robust compliance program so that the advisors don’t have to, to your point, go out and hire a full-time GC or a full-time head of compliance if they don’t need that, given their size and scale,

On the operation side, some advisors enjoy trading portfolios, some don’t. So we have a whole trading desk, trade overlay desk here that can take advisor’s models and trade them for them or can help, as I said, build portfolios that can be smaller retail portfolios or ultra-high-net-worth proposals, helping with RFPs, designing the allocations, selecting the managers, providing all of that type of investment support.

We have specialists in technology, in CRM. We have a whole CRM team that can help you build out a robust Salesforce instance, where we’ve invested millions of dollars, frankly, over the years in developing what we think is a really creative advisor-focused set of our own proprietary apps and tools inside of Salesforce that we’ve fully integrated with the various financial planning apps, whether it’s MoneyGuidePro or eMoney, NaviPlan, etc., where you enter in the information and CRM is prepopulating the planning, ties into our proprietary proposal generator. And then we have a wonderful custody relationship with Schwab, Fidelity, Pershing. We work well with all three of them. All of their paperwork is fully integrated into the system as well. So our desktop that the advisors will log into, single sign-on into all the various underlying components that they need to run the business.

A lot of advisors don’t oftentimes fully understand the numbers of their business, right? We’ve been talking about the fixed cost and variable cost. So we spend a lot of time educating around some of those KPIs, key performance indicators. We have our own OCFO toolkit that’s also on the desktop that allows the advisors to do business planning. And our consultants do that with them each year. And then we track their performance against their goals from the year. So my goal is to increase my ROA by 2 basis points this year and I want to increase my top-line by 12.5% this year. And then, which is also very important, they can comp themselves to similar-sized businesses in our network to see if they’re high on fixed and why that is versus their peers. And then they can reach out and have conversations with their peers and kind of share stories peer-to-peer as well. So that outsourced chief financial officer program is very popular because it’s giving the analytics and tools and resources to the advisors to help them think about how they build more valuable businesses over time.

And then lastly I would just say, Michael, whether it’s reporting or financial planning, toolkits, etc., we have a service desk of professionals who are available to help build customized reporting programs that can help understand the best ways to optimize various trading tools that we have on the platform, ops people that can troubleshoot issues with custodians as they may come up. So really trying to create an environment where you have a senior relationship manager and a service team behind that relationship manager that you can call that handles the entire ecosystem for you so that you don’t have to worry about who to call at all of these various firms that make up the tech stack or the resource platform that you’ve cobbled together over the years. You now have an integrated partner that can take pretty much all of that off your desk, again, in an effort to free up your time to help you grow your business and spend more time with clients.

Michael: Interesting. And so all of these pieces, marketing support from Gordy’s team and the compliance support and ops to the extent you don’t want to do your trading and tech specialists and access to all the various toolkits, all of that is bundled under the core business for which I pay my percentage of revenue fee that scales to my assets? That’s an all-in-one bundled thing and it’s just, it’s up to me whether I use every single part or I use a little bit more or I use a little bit less, my mileage may vary depending on how I want to leverage the platform.

Shirl: That’s correct. And it also includes access to a practice management team. All of our network events, we have an annual investment forum which we just wrapped up last week down in Dallas. We have an annual advisor summit. We do regional events. We do client events. We have Kentucky Derby coming up as well as the Players Championship on the PGA Tour where we use our scale and size to go out and secure a venue that the advisors on our platform can then bring their clients to. And it’s really with the focus that you well-articulated earlier, you may not…if you’re a $500 million RIA, it’s too expensive, it’s cost-prohibitive to go line up tickets at the Kentucky Derby to get in a suite. But because the Dynasty community has multiple advisors that would like to do that for a handful of their best clients, we’re able to go out and do that and put that experience together for our community. So you’re getting the big-firm advantages while being able to run your half a billion dollar RIA wherever you might be located across the country.

Michael: And so then in terms of the other service lines, so I’m guessing the capital business, just, you make money as a lender, that’s that old boring banking model, where you take deposits and lend money and make money on the spread. The investment platform offering I’m just presuming like, you’ve got a TAMP offering, it’s got its own natural cost that’s associated with it because you’ve got to generate some revenue to run a TAMP. And so advisors just pay the TAMP fee if they’re using the TAMP, not unlike any other investment offering that’s out there?

Shirl: That’s correct. Yep. So there’s a platform fee for a couple basis points for the integrated trading tools, which includes all of the research support that…we have 10 different research providers that advisors all have access to that integrates into the advisor portal. And then there’s platform fees, to your point, on SMAs or UMAs for the feeder funds if they want to use the alts. If they want to leverage our insurance platform or our lending platform, we have a whole host of different banks that we partner with, and we have lending team members that can help shop out more esoteric, large, non-purpose-type structure loans.

And then capital markets, occasionally we have clients that want to shop a transaction, a large single concentrated stock position, hedging, monetization, restricted stock position. Lyft obviously went public recently and Uber is around the corner, we’ve had an uptick in interest from clients. SpaceX is a name that is interesting to us right now, where clients are coming to us and they want access to those names on a pre-IPO basis. So our desk goes out and helps make that available to our network.

So it’s really, and one of the things I learned early on is not to go out and build a lot of capability that I think our clients will want and need. We’ve been, I think over the last five years at least, fairly smart about putting together an advisory board made up of our clients to tell us what it is that they need as their businesses evolve. So we’ve expanded those services as we’ve known that we have demand for within the network.

Their Typical Clients [1:00:59]
Michael: So talk to me about just typical size of firms. I’m presuming for just the sheer depth of the stuff that you do, when you’re charging a percentage of revenue, there’s some minimum size that a firm has to be at just for it to be economical for you to serve them and give them a slice of all these core services that you’re offering. So is there a minimum or a low end of how big does a firm realistically have to be to be a good Dynasty partner?

Shirl: Yeah, it’s a great question and in some ways it’s more art than science because, depending on where the advisor is located, if somebody is in a market where they’ve got $250 million in assets and they really want to focus on growing and we really see them as great community members and they really fit the culture of our community and we can have a lot of fun helping them grow both organically and perhaps inorganically, that’s an exciting client. In some ways, Michael, we’d rather have that $250 million client today that wants to grow to $1 billion over time by maybe adding an advisor every year or two and growing fairly aggressively organically versus someone who comes in with $500 million today but has no interest in growing. It’s a lot more fun for us to kind of get behind someone who wants to grow an enterprise.

But for us in general, it kind of starts at $250 million to be a beachhead, if you will. I think of us as that Intel sticker that’s powering the brand. So for us to add a new brand to the platform or a new logo on our wall that we have here, they tend to be $250 million or above. But we have a lot of $100 million wonderful books of business advisors that call and say, “Hey look, I want all the benefits of independence but maybe I don’t want to run my own business. Can you introduce me to one of the other RIAs on your platform and maybe I can join them?” And we will do this year more of those types of deals than we will do even of the beachheads. We’re going to have a good year.

We have a lot of deals signed. You’re going to see us active in the press in the coming months. I bet we’ll flow north of $10 billion of net new money this year, which is obviously a big number. And I wouldn’t mention it on the podcast if I didn’t feel pretty confident in it. It’ll be a combination of a dozen to, call it 12 to 14 new RIAs, but we’ll probably do somewhere between 15 to 20 M&A transactions that will also add anywhere from $100 million, couple hundred. We’ve done some 5, 6, we’ve done a $1 billion M&A transaction last year. So they tend to get larger. And it’s really about the personality of the advisor, where they are in their life cycle. And some now would just prefer to join one of our largest scale well-run RIAs versus doing their own thing. So a bit of a longer answer there to say that we don’t have a minimum, if you will. It’s really if you’re coming in at $250 million, you really want to grow, we can have some fun working together, that’s a pretty good client for us.

Michael: And then from a practical perspective, is there a typical maximum? Hey, if someone has got $20 billion and they want to come on the platform, I’m sure you’re happy to have that conversation. But I’m just assuming realistically at some point the firm is just actually large enough, it has managed to build out enough of its own infrastructure, it’s got its economies of scale off of staffing, they no longer have to run three more people than what they would run with you because they’ve grown into that size at some number of billions under management or maybe just at a certain level of revenue when they’re at $15 million or $20 million of revenue, is there some threshold that you’re finding on the upper end where it’s just less likely that the firms are going to work with the Dynasty-style platform and more likely that either they want to or they just already have built their own version of that infrastructure?

Shirl: Yeah, it’s a really interesting question. So I’m a fellow at the Aspen Institute, and we do a lot of study on entrepreneurship and a lot of business model analysis. And what’s interesting, I think of companies like Apple and what, $800 billion market cap, give or take, on any given day. They have four products and that’s it, right? You talk about incredible focus and you could put their products on one little table that you might have in front of you, and 90% of what goes into those products that they’re laser-focused on is outsourced, right? They don’t build really any of the components. Their focus is on brand and design. And you think of Uber that I mentioned earlier in terms of their IPO that’s coming, 95% of everything they do, as you well know, is outsourced, right?

So I find it really comes down to as much of personality as anything else in terms of what is it…do I want to spend a lot of my time working in my business or do I want to spend more time working on my business? And what are the things that are truly differentiated for me, my business, my clients, and let me hone in on those things that I’m really good that do provide that differentiated experience, the things that I can get paid for that can put margin in my business, and then get rid of everything else, outsource everything else.

So look, we have scenarios where Summit Trail is a wonderful client. We launched them less than four years ago. I think they launched with just under $2 billion, they’re already at $6 billion. And we’re providing the middle-office support that we’ve talked about for them. And they’re continuing to open offices around…they’re a national RIA and growing very, very rapidly organically and doing a great job by adding other like-minded advisors. I think of Geller Family Office here in New York, north of $4 billion RIA, been independent a long time and certainly have resources that they could go hire more people and spend more money on technology and try to put together platform components on their own, but they just found it’s a better use of their time and resources to hire us to come in and do that. So we do have some very large RIAs.

We have a separate unit called Dynasties Enterprise Group that focuses on that couple billion dollar-plus RIA, because there are some nuances and multicity, multi-advisor-type firms and having very specific technology and programs that are needed for that type of client segmentation. So we have a separate group, versus the group that focuses on that traditional $500 million, $600 million RIA, which is really, to your earlier point, kind of our bread-and-butter client.

Michael: Yeah. You make such a powerful point to emphasize that Apple at the end of the day basically only makes 4 products and about 90% of the production of those is outsourced. That you can have an extraordinarily large company where you just get hyperfocused at the thing that you create the most unique value on and outsource and let go of the rest. But you do, I think, make an interesting point as well that there’s sort of a personality fit. There’s a psychographics fit here. It sounds like your ideal advisor really just is, it’s that advisor that genuinely wants to be an entrepreneur and grow a substantial enterprise and is simply making a business decision like, “I don’t need to scale my middle office to build a successful firm. I’m going to outsource, scaling my middle office to Dynasty who can power this portion, and then I’m going to go spend my time focusing on the parts of my business where we actually add value, where we do our unique layer that can’t be outsourced. And we’ll hold on to that, but we’ll let go of the rest the same way that Apple does.”

Shirl: Absolutely. Look, managing your middle office is not going to typically make you more money as an advisor, it’s not going to add enterprise value to the business, and it’s typically not going to be something that differentiates that client experience. So why spend a disproportionate amount of my time on those middle and back-office things that don’t accomplish those core objectives that most every advisor that I ever worked with in my career is focused on?

Where Their Growth Is Coming From [1:10:02]
Michael: So talk to us a little bit about where the growth is coming from for Dynasty and where you’re getting traction. You mentioned early on that when you started it was mostly breakaways. I was sort of giggling as you said. I was like, so basically, Smith Barney was right to be afraid of the cannibalization because you launched Dynasty and started cannibalizing wirehouses. Now you said you’re finding much more traction with independent RIAs. So who’s coming to the table these days? Where are these advisors who are focused on building enterprise and scaling and want to outsource the scaling of the middle office because that’s not where they build their value? Who are those advisors? Where are they coming from? Where are you finding these opportunities?

Shirl: Yeah. Look, I would say all roads lead to RIA. All roads are leading to the RIA space. And if you look at asset managers, and I spent a lot of time with the people who run some of the largest asset managers in the world, and the reason they want to hang out with me is they’re trying to fine-tune their RIA strategy. You look at the investment and growth of the custodians. You look at all of the new technology firms that are coming online to support RIAs, all the capital that’s flooding in. You have sovereign funds now, you have strategics, you have asset managers, you have private equity firms. It seems like there are 20 buyers out there for every seller right now in the space. It’s a bit frothy, frankly, but it’s an exciting time to be the owner and operator of a well-run RIA.

So the result of that is, to answer your question, the opportunity seems to be coming from everywhere for us. And what we have to do is analyze, as I tell my team, we have to look at what’s the grief, the gross for us? Meaning, can we make a fair wage and it’s someone that we’re going to be proud to be in business with to make sure we can be selective? And that’s the benefit of our capital structure, that Dynasty is owned by all the individuals who work here. And by the way, they all wrote a check to buy equity as well as options programs that we have, and our investors. So I do not have a private equity gun to my head, right? So we’re building the business. While it’s built up fairly rapidly, it has been methodic in how we’ve built the business out.

So we’re now at a point where we’re onboarding, yes, those very large breakaways. And there’s no one that’s done more billion-dollar breakaways in the industry than we have. And that’s great. We like that business. We’re seeing a lot of breakaways into RIAs, as I talked about earlier. We’re now seeing more IBD teams, so the independent broker-dealer channel where, using their language, they’re coming to us and saying, “I feel like I’ve outgrown my current chassis, which is more retail in nature. I think I want to maybe make a move to a more traditional RIA custodian. I want to upgrade some of my technology. I want to own equity in a standalone RIA. Maybe I want some liquidity even around that.”

So we’re seeing more and more IBD teams that are making…and it’s leading and some of them are coming over, and I’m oversimplifying this because I think your listeners would understand this term, but they want to almost migrate the OSJ model into the RIA space. So you’re seeing leaders of groups of advisors, whether it’s a branch manager at a wirehouse or an OSJ manager in the IBD space now looking to go to the RIA space, but they want supported infrastructure and capability from a firm like Dynasty so they don’t have to go out and spend aggressively through their capital to get in the ready position to be able to scale and add more advisors.

And I think you’re going to see, Michael, more of these multi-team moves, right? So before, you may have larger individual advisors, but I think you’re going to start to see producing branch managers, several advisors, multiple teams, maybe even from multiple firms all making the move to get to scale, create a splash, really looking to build regional strong RIA brands, which is why…I know you’re out there doing a great job on the speaking circuit and we run into each other out there from time to time, and what I’m telling advisors is, “Look, 5 years ago if you were a $500 million RIA and you’re out there telling the fiduciary story and the independent story, you were feeling pretty good. Five years from now, that’s not going to be a differentiator.” Because firms like Dynasty, we’re literally launching billion-dollar new entrants into this space monthly, right?

So they’re going to have the same story, they’re going to have scaled access to technology systems, products, services. So the big competitors that you’re going to have to worry about as a couple hundred million dollar RIA, going forward it’s not going to be kind of shooting the fish in the barrel versus a Merrill Lynch or a Morgan Stanley or UBS because it’s such a different model, you’re going to have to figure out, “How do I tell my story against some of these large-scale, professionally run, well-capitalized RIAs?” And I don’t think a lot of the smaller RIA principals out there really thought that through and what the ramifications could be for them going forward.

Michael: So how do you look at other players now that are trying to enter into this RIA space as well? I was saying the earlier comments of, Smith Barney didn’t want to pull the trigger on this because they were afraid of cannibalization, now we’ve seen the announcements like UBS working on an RIA services platform, Wells Fargo launching one with I think a pilot advisor or two. So do you see this realm where wirehouses now are taking the advice they didn’t want to hear from you 10 years ago but now they’re actually going to try to do it and, I guess, fight back or at least retain their existing advisors or try to attract advisors in and say, “Oh, you think Dynasty is big? We’re going to do it with 10X or 50X to scale,” because they’re mega-wirehouses?” Do you view that as a shift in the landscape or do you consider this to be something else?

Shirl: Yeah. About six months ago I kind of coined this phrase, “captive independence.” And it was a bit tongue-in-cheek when I did it, but it is was my way of kind of describing the banks and the wirehouses now kind of finding religion, if you will, around the RIA space. And I guess I would say it’s gotten annoying enough for them. They’ve lost enough advisors. And the press doesn’t talk about what I also describe the breakaway client movement. The press talks about the breakaway advisor movement, but the reality is if you look at the asset migration of the large-scale RIA custodians, the reality is 70% to 80% of any new asset flows in any given year is same-store sales, right? It’s the RIAs that are on their platform that are growing disproportionately versus their wirehouse counterparts.

And then you add in the new store sales that doesn’t really happen at the wires but is happening at the RIA and it’s easy to see that eventually, because these wirehouses are not run by people who are not bright, they get what’s going on, and they’re looking at and saying, “Look, at the end of the day, what they really care about is product distribution, and there’s only so much product I can sell. Even if I have 15,000, 16,000, 18,000 internal advisors, wouldn’t it be nice if I could, in a rising rate environment, ultimately be a custodian for RIAs and have the cash there and leverage noncompensatory revenue items like margin lending and things that you don’t pay advisors on?” Right? The custodial economics that we all understand.

So you see firms like Goldman Sachs launching product programs and having coverage team and institutional service groups providing services into RIAs. I expect that you will ultimately see more of the banks, more of the wirehouses. And they’ll do it, Michael, for two reasons. One is defense, which is a little bit of what you alluded to, which is if I’m going to lose this advisor anyhow then maybe I can move them to captive independence, right? Pseudo in to give them a little more autonomy, right? Someone who wants full independence wouldn’t accept it. They’ll jump over that and they’ll go out and do their own thing, right? But maybe I’ll capture some of them and I’ll try to scare people into going in that direction versus having the courage to go ahead and do their own thing.

And then the offensive side is where I make most of my money anyhow because I’m low teens on the margin side, on the advisory for the most of these firms, but I’m high 20s in margin on my product manufacturing. So if I can sell more high-margin stuff to more people and I can see my private client division just as my largest client, but then I can have other clients, I can go to Dynasty and provide access to capital markets and lending and services to Dynasty at the HoldCo level to then make available to all of their underlying firms, and then I can go out and cut partnerships with RIA custodians, etc. to provide more service to them. That’s where the industry is going. So when I say all roads are leading to RIAs, that means the banks, the wires, the asset managers, the product…everyone is thinking about, “If I’m going to play wealth management, how do I get a strong foothold and have a long-term strategy around what’s happening in the RIA space here domestically?”

So it’s an exciting time. If you’re in the space and you can create time to take a half step back and think about, “What does that mean to me whether I’m an RIA principal, whether I’m a technology service provider, an asset manager that’s trying to distribute into the advisory space, whether I’m a custodian and what that means to me in terms of some of these other scaled players potentially entering into the space, what does it mean to a service provider like us?” Everyone should be thinking about that dynamic because it’s coming and it’s going to come quick.

The Path He Took Towards Entrepreneurship [1:21:02]
Michael: So take us back for a moment to the background that took you down this path. Were you someone that from early on had this vision that, “I want to be an entrepreneurial builder and build a business I guess in financial services or in anything?” Was this always the path that you saw yourself on for building a business?

Shirl: Yes, although if we go back to my roots in Maine, I had kind of a non-traditional route to get into finance. I was raised in the easternmost point in the U.S. A little fishing village called Eastport. Raised by my step-granddad and grew up kind of on the poor side of the tracks, actually homeless even for a couple of years. As you know, went to Bates, which I know is your alma mater as well. Great school in Lewiston, Maine. The Bobcats.

Michael: Yeah, the random history trivia is Shirl and I actually went to college together and overlapped three out of four years at Bates with not really knowing each other. I kind of have a vague memory of overlapping, but I played squash, you played baseball. We were in dorms basically on the opposite sides of the campus from each other, so didn’t have too much overlap at the time. Only found out 10 years later crossing paths in the industry like, “Wait, you went to Bates? I went to Bates. When did you go to Bates? That’s when I went to Bates.” Like, “Oh, okay, small world. How about that?”

Shirl: Well, you were with the cool kids, right? So that’s why we didn’t hang out.

Michael: Oh God, no. Not me.

Shirl: But anyhow, made my way down from Lewiston to New York and kind of worked my way up at Smith Barney, and was given a lot of responsibility early on in my career and really appreciate a lot of the mentors that I had there and was a great place to grow up in the business. But the most fun that I had was living in the field with all the great advisors at the firm who would frequently put me in front of their top clients. And we would run these meetings, we called them VIP meetings, where we bring $100 million, $500 billion clients in and introduce them to Sandy Weill and the senior executives in the firm and the different product heads in the investment bank, etc.

And I remember after a few hundred of those asking myself, “What do all these…I’ve had this incredible experience of meeting all these interesting people, what do they all have in common?” And it really struck me that they all took a calculated risk, they bet on themselves, and they all had significant success through equity, right? And it’s very difficult to make true, significant wealth in this country as a W-2 earner. And I said, “You know what? When my pitch failed 15 years ago for us to power the early RIA movement,” I said, “You know what? This is probably my opportunity to sit on the other side of the table, to go be an entrepreneur, to build a service infrastructure that helps power this whole independent movement.” And off I went.

And as we said earlier, obviously, no one could have predicted that from a timing perspective, while it was challenging to leave in the early part of ’08 and then to raise capital in the height of the financial crisis, flip side of that was all of those large brands obviously went from being, in a number of cases, an asset to a liability on the business card of advisors, which once I got up and running allowed us to more quickly grow the business by bringing advisors on that wanted a more independent story.

What Surprised Him The Most About Becoming An Entrepreneur [1:24:35]
Michael: As you started down that journey, what’s been the biggest surprise to you about this entrepreneur path of trying to build your own business?

Shirl: Well, I’ve been a big believer in mentorship, and I have a lot of mentors. And mentorship by committee is always an approach that I’ve taken, and not just in our industry but all different types of mentors.

And I have been surprised, and I tell this to people all the time, even though people told me, “It’s going to be really, really hard to get off the ground, to raise the capital in a way that you still have control, that you’re not giving away all the firm to the investors, asking your friends,” and we mentioned Bates, I have five of my old classmates that are here. And I was captain of the baseball team my senior year, I have a person who was a junior, a sophomore, and a freshman, so three of my old teammates that are here. And I’ll tell you, a number of them came in and worked for free for a year, a year and a half. One guy slept on my couch for a year. Working out of an apartment and Starbucks in Manhattan, in my garage in Saratoga Springs, the classic kind of entrepreneurial trials and tribulation and kind of living “Shark Tank” in real time. Meeting with 100 different investors to try to, again, raise capital in a difficult part of the capital market cycle, to say the least.

Michael: Yeah, it’s hard at any time, never mind in the middle of the financial crisis when everybody is just trying to make sure they’re solvent.

Shirl: Yeah. So look, you want to take the island, burn the boats, right? So my wife and I would chuckle that the boats are long gone and we’re all in now. And then you get the funding, you get the business up and running and you feel like you have a half a second to celebrate, and then you realize it’s even more difficult at that point to now start executing against the business plan. And so that journey has been harder. It’s like a lot of things in life until you’re…it’s like being a parent, right? Intuitively, you can say, “This is what it must be like to have a child,” but until you’re a parent, you can’t fully appreciate it or have empathy with it.

Their Biggest Competitive Advantage [1:26:56]
If you’ve never been an entrepreneur and you’ve never made that leap and that jump, it’s tough to describe to someone all the emotions and everything that goes with it. But look, most all of your listeners understand that because they’re….and that’s frankly, I think, today one of our very biggest, Michael, competitive advantages as a service provider to RIAs is that we are entrepreneurs servicing other entrepreneurs, right? We’re not some large company that’s trying to sell something to an RIA or a breakaway and saying, “Trust me, you’ll be fine.” We’re saying, “You know what? I’ve been there and stayed overnight. I’ve seen the movie, I starred in the movie, I wrote the script. I’ve done it and I get it.”

Just earlier this week, we’re getting ready to launch a business, and I sat in the living room with the team and all their spouses in their home for five hours and just talked about all the emotions we’re about to go through and make sure they all understood how it’s going to work. Overcommunicating at home as an entrepreneur and making sure that your family understands. And I said, “Look, your spouses are going to be working really hard for the next six months. This is a process through this transition, but here’s the benefit. Here’s what’s coming out on the other side of it.” So we get to live our American dream by empowering others to live theirs. And it’s incredible to be able to experience it and to see all the jobs that are being created and the enterprise value that’s getting created from all these firms that we’re helping to play our little role and, like I said, be the Intel sticker to help power their independence. It’s been an incredible journey over the last 10 years.

Michael: Well, and I love the point that you made there that you can’t overcommunicate enough at home about getting buy-in from the family about this as well. Never mind, if you’re going to raise capital, getting your investors on board and getting your employees and team on board, particularly the ones who are taking this blind leap risk with you, but that dynamic that look, if you’re an entrepreneur, it’s really hard for your emotional rollercoaster in and out the business to not come home with you, at least to some extent, particularly early on. And just that importance of having family buy-in and having family support and just preparing them that you may need a little bit of support while you go through the coming rollercoaster is, to me, a really big deal that I don’t think it’s talked about enough in the industry as people are looking and getting started of how much that family support system really matters, and likewise, how much damage you can do to your relationship with your spouse and family if they don’t know what’s coming and it makes the situation even more stressful than it already is.

Shirl: Yeah. No, I agree with that. It’s getting a little bit easier. I wouldn’t say a lot. But we’ve done this now well north of 50 times, so we’ve kind of, I wouldn’t say…you’ve never seen everything but you’ve seen a lot. But I think about just the incredible roster of clients, and we’re so appreciative that they’ve entrusted their life’s work. And that’s how we see it. A lot of the entrepreneurs that we support, they’re 100% levered in terms of their personal net worth to the business that they’ve built. And the fact that they would trust us to help them protect it, grow it, we see the world through that lens. And if our next transition or setup of a business doesn’t go well then those other 50 don’t matter.

And that’s the focus we have and the fact that all of our original clients, after all this time, we still have them, and we’re able to help them be successful. And they’ve been so loyal and committed to us when it was just the concept, right? It was, “Trust us. Jump out this window, the handshoot is going to go up and it’s going to open, and I got you.” It’s a little easier now for somebody coming in because we’ve done it so much, but I think back of those first few clients and how incredible and brave and trusting that they were and just will forever be indebted for them to believe in us when they did.

How His Role In The Company Has Changed Over The Years [1:31:27]
Michael: So how has the role changed for you over the years?

Shirl: Yeah, that’s a great question. We definitely have professionalized the business. And I tell a lot of entrepreneurs, the most difficult part of leadership, unless you’re a jerk, and most people are not, is having tough conversations with your team members, and especially those that you’ve known for a long time, and realizing that if you really want to build a big business, you want to build a substantial sustained legacy-type business, you have to be willing over time to have those tough conversations. And the people that get you here may not be the ones that get you there. We have had to upgrade talent over time. We recently announced moving our headquarters to Florida, which I think will put us in a position to really scale the business in the future and continue to put more margin in the business and allow us to make more investments in people and technology to take better care of our clients.

But in the early days, Ed Swenson, who’s one of the original co-founders of the business, Ed and I have worked together essentially our entire career. He also went to Bates, although he didn’t play baseball, he captained the rugby team at Bates. And we were roommates back at Bates. But Ed has very complementary skill sets to mine, but early on we would joke that Ed wore…I was out there driving sales, but Ed wore the hat of every other role and responsibility in the firm. That somebody would call up and you’d press 1 through 5 but no matter what number you pressed, you got Ed.

Michael: Yeah, it was all going to the same person.

Shirl: Yeah. So yeah, early on you do what you…you know this, right? You have to do everything. And over time, as we’ve grown, we now have professional CFO, we have a general counsel, we have professional operations, etc.

So I spend a lot of time with clients. That’s one of the things that I enjoy most. And I feel like it’s really dangerous for leaders to not have proximity and to get out there and listen to clients who… I love our model is the alignment in that if our clients don’t do a good job for their underlying client, they get fired. Well, it’s the same with us, where we have to stand and deliver every day or we get fired. And I love that alignment of interest. It’s very pure and, I think, differentiate and frankly, the way the industry should be. And by getting out and talking to advisors and their clients. I meet with probably hundreds of end clients every year with our advisors and I hear from them what they like about our technology and product set that we’re providing. I find that to be very useful.

At the high end of the market. I find, and I don’t see this changing anytime soon, the really large teams, at the end of the day, they’re not going to make a significant buying decision without having a relationship with the CEO. So while our brand now stands on its own and we have a great business development team, I still have to get out and see a lot of the teams at the moment of decision-making to help them and us assess if it’s a right fit.

And we’re big enough now that one of the things that…I mentioned background and kind of how I grew up, I think that the financial health of this country is not in a good place. Whether you look at governments at the federal or state level, pension funds, various underfunded commitments in that regard. You look at the fact that north of 70% of Americans can’t put their hand on $500 in an emergency situation. So the financial health is very sick right now kind of across the board. And as a kind of a proud patriot, if you will, I think that quality financial advice, and I know this is something that’s near and dear to your heart and what your whole community and ecosystem is focused on as well, but we have to make the system work for more people.

And now that I have a bit…my microphone is growing with our business here and my work at the Aspen Institute, and it’s something that I think about kind of the next phase of my life, I think, is trying to give back and encourage and persuade and be kind of a cheerleader for independent financial advice to be delivered in a way that makes a positive impact on improving the financial health and wellness of various constituents across the country. And I hope that all of your listeners that have the ability to give more and do more and to help not just kind of leave the ladder down but collectively working together build an escalator that more people can come up and participate. It’s something that I think is, if not addressed and if not us then who? If we don’t focus on it, it’s going to become a big problem for this country going forward.

His Low Point [1:36:48]
Michael: So what was the low point for you?

Shirl: I would say that it was probably two and a half years in. I was an okay income earner, but I was young. I was 32 years old when I launched this business, so I hadn’t had…and again, homeless as a kid, self-funded my way through Bates working odd jobs, paying back those student loans. We had a little bit of a cushion but not an enormous cushion. And after going two years, seven months and four days, as my wife kept track, without a paycheck, we were running on fumes. And it was time to launch the business. And I remember there were a handful of investors, and I’m sure again, there’s a number of entrepreneurs listening to this podcast that can relate, who said, “Okay, I’m in.” And we were getting ready to close the round and then the next day the capital didn’t show up.

And that is when you’re so close and all the pressure because all your best friends are sleeping on your couch and believing in you and working for free, and you’ve got young kids at home and your wife’s believing in you and supporting you and everyone’s all in and then it’s another…it feels, “Okay, just two more weeks, two more weeks.” And I would say that’s probably the lowest point. And saying, having that conviction that it’s what I wanted to do and getting offered jobs along the way and passing on significant opportunities.

I saw this great interview once with Steve Jobs and some of the clips from it were used in their great ad campaign where the great line about the people who are crazy enough to think they can change the world are ones that actually do. But if you listen to the rest of that interview, he talks about how they’re crazy because any sane and rational person who understood the odds and looked at what it’s going to take to get there wouldn’t do it. So I look back and there was never any…just in my mind, I believed that I would be here. I have north of $30 billion and have 50 of the greatest RIA clients and have created significant wealth for my partners that are here. And I just believed that we were going to do it. Although the odds of us sitting here and having this conversation, if you looked at it, they’re north of 10 million to 1. I should have been playing the lottery, right?

And I think if you talk to a lot of successful entrepreneurs, they kind of say the same thing, right? It’s they’re going to grind it out. They’re going to put their head down. They’re just going to outwork everyone and do what it takes to be successful. And not all the time. I’m not naive to think that…I’m also very lucky and fortunate that the investors came in when they did. And my partner, Todd Thomson, helped put our board together and Ed hung in there long enough, a year and a half without a paycheck and didn’t leave me. And our first clients believed us to come on. It’s all those things. You have to be lucky. And the custodians early on got behind us and backed us. And my friends over at Envestnet, early on when we didn’t have any assets, willing to believe that we would and buy into the vision.

Like I said, it’s been an incredible journey. It’s been a lot of work, but there definitely were those low points where…the last thing I’ll say on this, and I say this to a lot of entrepreneurs starting a new business, get yourself a buddy, right? Because when those times are really tough, having my buddy, Ed Swenson, having my co-founder, Mary Ann, my wife, was just incredible, lift me up and make sure that I don’t stay in a low point for too long is critical when you’re trying to do something that’s a heavy lift in life, that support mechanism around you is a big, big deal.

Michael: So, as you look back, what do you know now that you wish you’d known then about I guess either building the business or the advisor marketplace you’re serving?

Shirl: I think in hindsight, I could have been…we could have been more aggressive. And I guess it’s easier to say now because, as they say, hindsight is 20/20. I talked about advisors being levered to the business. I’m 110% levered to Dynasty. I’m long Dynasty stock. And while it’s done well for our investors… And I think, and this gets back to the RPN conversation we had earlier, I’ve had several of our clients come and say, “I feel like I’m a better leader now that I’ve done this small liquidity event because I have some breathing room. I feel like I can more comfortably take a little more risk.” Right? And I tell, “Look, maybe you can risk a finger or a toe, you should never risk an arm, and certainly never risk your head. But when you have a little more capital over time put away, you’ve taken a few chips off the table, I think ultimately, it changes your perspective, sometimes in a positive way.”

And I’m still very, very levered to Dynasty, but knowing what I know now, I could have been more aggressive. We could have been adding more advisors quicker than what we did. We’re out on the M&A trail now, Michael. We’re looking at opportunities at the HoldCo to buy our supply chain. So whether it’s technology service providers or other service providers that can broaden what we provide, we’re large enough now that we can buy some of those firms and control the experience. There’s probably opportunities that we missed over the last couple of years because we’re just too conservative, not willing to risk the capital or our position and we’ve missed a few things. But you learn from that. But overall, I probably wouldn’t trade, in what we do and where we are in the RIA ecosystem, I wouldn’t trade our brand, our balance sheet, our client roster, our team, I wouldn’t trade where we are with anyone right now.

Michael: So you alluded a little to potentially going out on the M&A path and kind of buying some of your own service or tech providers and integrating more vertically. But beyond that, what comes next for Dynasty? What else are you looking at as the next stage or stages of the business here?

Shirl: So there’s that element. There’s deploying more capital to help fuel the growth of our firms. I also think, and more and more of our clients have been asking us for this, now we’re getting of scale, there’s probably an opportunity for us to drive, yeah, I guess what I would call ingredient marketing. And there’s some great examples. I guess NutraSweet is an example, Intel, as I mentioned earlier, maybe even a better example, but where an end consumer is making a purchasing decision based upon one of the ingredients.

Right now a lot of the confusion when you sit with clients is while they might get the benefits of working with independent advisor, they say, “Okay, great, how do I pick between all the independent advisors?” And I think that Dynasty is in a unique position to ultimately become the good housekeeper seal of approval for independent advice, right? So to help educate the consumer in why they want to get advice separate from product manufacturing, but then when I’m looking for one of those independent advisors, look for one that’s powered by Dynasty because they have great technology and X capital and they’re well-run and they’re clean, compliant, etc., etc. They have a scale deliverable. So our marketing team, we’re doing some work.

And what that does then is it fuels clients. And we’ve started to have this happen, where clients are now coming in through our website and reaching out and saying, “Can you introduce us to one of your advisors?” And so you’ll see us do more in the mainstream media, really being advocates for independence. I almost think about it, Michael, you think about the great job that the dairy industry did with Got Milk? I think us going out and helping to lead kind of a why independence-type movement and driving more consumers this way. And as that happens, I think Dynasty the Dynasty RIA boats, if you will, those waters should rise hopefully in a slightly disproportionate beneficial way because of their affiliation with us.

Michael: Interesting. So, just as the Intel Inside sells a lot of computers because Intel is inside, what can “powered by Dynasty” do to independent advisors who are powered by Dynasty?

Shirl: You nailed it. Absolutely.

How Shirl Defines Success [1:45:57]
Michael: So as we wrap up, this is a podcast about success, and one of the themes that always comes up is just literally that word “success” often means different things to different people, sometimes different things to us in changing stages of our own lives. So you built what I think anyone would objectively call a very successful business, scaling up to 70 employees and tens of billions of dollars on the platform, but I’m wondering just for you at a personal level now, how do you define success for yourself?

Shirl: That’s a great question, and I’ll be honest, it’s not something that I spend a lot of time thinking about. I guess I would say I’m probably…today is the happiest day of my life, and I expect tomorrow to be even better than today. Other than, I think about my grandfather, who’s actually my step-granddad and the sacrifices that he made in raising me, I don’t spend a lot of time thinking about the past. I’m head-over-heels in love with my wife, blessed that she’s in my life. I have two gorgeous, smart young ladies, daughters that are just amazing. This business and the partners and the clients that we have here.

In terms of a dollar and cents, when you’re younger you think, “Oh, someday if I can have a net worth of some number,” I’ve blown past that candidly. So now for me, I look at the cap table and I don’t look at myself, I look at all of the people who believed in this vision and they’ve taken what started out as kind of my why and vision and they’ve evolved it in many better ways to make it their why and their business and where they want to go. And the result of it is we’ve created on our cap table quite a number of millionaires. And I’m incredibly proud of that. I look at what we’re doing with our clients and the impact on their lives and the end client.

And I’m a huge believer that success is best when shared. I have a house up in Maine in my hometown of Eastport, we’re going up for the 4th of July this year, we’ll take 60 or 70 people with us. It’s a huge group of family and friends when we go to other trips. We’re blessed to have the friends that we have. I own thoroughbred racehorses. You come to Saratoga Springs, which, my hometown now, for a race, it’s not unusual for us to have 100 people with us to watch one of our horses run. So I think, I guess, a great question. I would say that I would measure my level of success based upon hopefully the lives that my wife and I have touched in a positive way with the charities we’re involved in, with the business that we’ve built, the jobs we’re creating, the clients, etc. Not so much in terms of dollar and cents.

And look, I’m 42 years old, I’m just getting started. I think there’s a much bigger dent that we can make kind of in the industry, if you will, to drive positive change. There’s a lot more that I want to do more broadly as a leader in our country to help drive a financial wellness in the country. I think in some ways, my journey from being homeless to buying a $13 suit at the Salvation Army, riding a bus for 18 hours to New York City, knocking on a door and getting hired and building the life that I built here in this company, I hope that people listening to this will hear it and say, “You know what? I can do it. If a hick from the sticks of Maine can come down and create that type of business then I can do it.” So I hope more people get inspired. And I’m looking forward to kind of the next chapters of my life, Michael, and giving back and helping to influence and encourage other people to have the same type of incredible opportunities that I’ve had to build a career in the industry that you and I frankly are blessed to be a part of.

Michael: Well, amen, I love it. And still the forward focus of how much time there still is left and all the things that you’re still just getting started on, I love it. I can’t wait to see what’s next and what you dive into next.

Shirl: I appreciate it. And that feeling is mutual. I can’t wait to see what you do next as well, my friend.

Michael: Well, thank you. Well, you graduated, you’re ahead of me, so I’m only a year behind you at 41. So I’ve got a little gas in the tank left as well. We’re not quite done. There’s a little more left. But thank you, Shirl, so much for joining us on the “Financial Advisor Success” podcast.

Shirl: Thank you, Michael. I’ve really enjoyed it. Thank you so much.

May 13, 2019

Northern Lights: Great Diamond Partners of Portland, Maine is Launched in Partnership with Dynasty Financial Partners
BusinessWire

Leading wealth advisors Steven Tenney, Joseph Powers, Helen Andreoli and Jack Piper today announced that they have partnered with Dynasty Financial Partners to form an independent wealth management firm called Great Diamond Partners. All [...]

Leading wealth advisors Steven Tenney, Joseph Powers, Helen Andreoli and Jack Piper today announced that they have partnered with Dynasty Financial Partners to form an independent wealth management firm called Great Diamond Partners. All four advisors had previously worked at UBS.


Based in Portland, Maine, the firm has a total staff of seven professionals, including four financial advisors. Joining from UBS are the following professionals:

Mr. Tenney is the CEO and Founding Partner of Great Diamond Partners. Mr. Tenney has worked at UBS since 1993, most recently as Senior Vice President and Senior Portfolio Manager. He is a Certified Portfolio Manager™ and a Certified Exit Planning Advisor™ (CEPA®).
Joseph Powers leads the Financial Planning and Insurance Strategies focus for Great Diamond Partners. He worked at UBS as a Private Wealth Advisor since 2000. He is a Certified Financial Planner ™ (CFP®), a Chartered Life Underwriter (CLU) and a Certified Exit Planning Advisor (CEPA®)
Helen Andreoli is the Chief Financial Officer and a Founding Partner of Great Diamond Partners. A 20-year veteran of the financial services industry, having worked at Morgan Stanley, Merrill Lynch and UBS Financial Services, she is a Certified Financial Planner™ (CFP®).
As a Founding Partner of Great Diamond, Jack Piper works with individuals and families, helping them to craft a plan to reach their financial goals. He also works on the investment team in developing and managing client portfolios. Mr. Piper worked as a financial advisor at UBS Wealth Management for four years. Prior to that, he worked at Bainco International Investors in Boston, holding a variety of positions before ultimately serving as a portfolio strategist.
Great Diamond Partners is an independent wealth management firm based in Portland, Maine. The firm integrates disciplined investment consulting with personalized advanced planning, superior technology and a boutique client experience. Consistent with their focus on families, many of whom are or have been business owners, the firm has deep expertise with business transition planning. Great Diamond Partners helps owners prepare for and execute successful transitions, whether that is an intergenerational wealth transfer, outright business sale or other possible outcome. Great Diamond Partners’ advisors are Certified Exit Planning Advisors and Certified Financial Planners, all skills needed to execute a successful transition.

“We have always maintained that every element of what we do needs to be in our clients’ best interests. Now we recognize the unquestionable benefits to clients in working as an independent firm, and the Dynasty structure allows us to execute on our vision,” according to Mr. Tenney. “We will be able to provide an even better client experience due to vastly improved technology, advanced planning resources and tools and the fiduciary environment when making recommendations. Finally, the expanded resources are tremendous – everything from advanced planning software to investment banking, investment consulting and business management.”

Great Diamond Partners plans to expand their footprint by recruiting like-minded advisors who may be seeking to join an independent advisory firm.

“The breakaway movement is reaching a tipping point. Again and again, some of the best advisors in the industry are seeking true independence as the model that is best for their clients, their employees, and themselves. We are seeing veteran advisors with 20 plus years at their firms choosing to take the road to independence and this movement is accelerating,” said Shirl Penney, CEO of Dynasty Financial Partners. “Specific to Great Diamond Partners, they are deeply committed to our home state of Maine. As someone who was born and raised in Maine, I am particularly proud to partner with high-caliber advisors like Steve, Joe, Helen and Jack and their remarkable team, and we welcome them to our Network of independent advisors. I am excited to have one the largest and leading financial advisory teams in Maine on the Dynasty platform and look forward to partnering with them to grow their business.”

Great Diamond Partners has partnered with Dynasty Financial Partners to leverage Dynasty’s wealth management services, people, leading technology, and capital support. The firm will be using Dynasty’s award-winning integrated Core Services platform for independent advisors and using Dynasty’s turn-key asset management platform (TAMP). They will have access to leading technology, including Dynasty’s proprietary advisor desktop, in-house specialists, home office support, and will benefit from the firm’s significant scale in the industry.

Among its other resource partners, Great Diamond Partners has selected Schwab to provide custody services for its clients’ assets and Black Diamond for consolidated asset and performance reporting.

For more information, please visit www.greatdiamondpartners.com.

About Dynasty Financial Partners

Dynasty Financial Partners is known for assisting advisors of integrity to better service their clients, run their businesses more profitably, grow faster, and enhance the enterprise value of the advisor’s firm. Dynasty does this by developing, sourcing and integrating management capabilities for some of the industry’s leading independent investment advisory firms. Dynasty’s award-winning integrated platform services delivery chassis offers a customized, open-architecture wealth management solutions and technology platform supporting advisors as they protect and grow their clients’ wealth. Dynasty hosts numerous events to allow the community to come together and allow top RIA firms to be independent but not alone. Dynasty also offers access to capital to help advisors expand, scale and grow their business. Dynasty’s core principle is “objectivity without compromise,” and the firm is committed to crafting solutions that allow investment advisors to act as true fiduciaries to their clients.

Also visit Dynasty on social media:

LinkedIn:https://www.linkedin.com/company/dynasty-financial-partners
Twitter: @DynastyFP
Youtube:http://bit.ly/1MKXhC8

May 13, 2019

Wealth Advisers Are Fleeing Big Banks For Smaller Firms

Another day, another team of wealth advisers leaving a Wall Street bank. Four UBS Group AG private bankers overseeing $530 million in client assets are the latest to strike out on their own, creating a Portland, Maine-based firm called Great Diamond Partners, according to a statement Monday. Last week, five Bank of America Corp. advisers in Atlanta overseeing $450 million in client assets [...]

Another day, another team of wealth advisers leaving a Wall Street bank.
  
Four UBS Group AG private bankers overseeing $530 million in client assets are the latest to strike out on their own, creating a Portland, Maine-based firm called Great Diamond Partners, according to a statement Monday. Last week, five Bank of America Corp. advisers in Atlanta overseeing $450 million in client assets departed, while a $6 billion Texas team split from Morgan Stanley in April.
 
Breakaways are occurring more frequently as advisers hoping to exert greater control and keep a larger share of the revenue bolt big banks to create boutique firms. Smoothing the way are technology ventures such as Dynasty Financial Partners, created by former Citigroup Inc. executives, which provide record-keeping, trading platforms and product offerings once available only at the largest firms.
 
 
“Large complex teams require large complex solutions," said Tim Oden, senior managing director of adviser services at Charles Schwab Corp. “Before the ecosystem existed they had no choice, but now they have a choice.”
 
 
Siphoning Talent
Other wealth-advisory firms including Rockefeller Capital Management have also been siphoning talent. The company, run by former Morgan Stanley executive Greg Fleming, has lured teams from Bank of America and UBS in recent months as part of an expansion strategy.

A 10-year bull market and an increase in the number of wealthy families across the U.S. have helped fuel the movement. Most of the recent breakaway teams have yet to be tested by a slowing economy or serious market correction, but Great Diamond founding partner Steven Tenney said some of the risks have been mitigated by improvements in technology.

“The technological advances are independent of the economy and market cycles,” said Tenney, who spent 26 years at UBS. “The best way to capitalize on that technology is by being an independent firm.”

UBS spokesman Peter Stack declined to comment.

‘Well-Traveled’ Road
Great Diamond, as well as the advisers departing Bank of America and Morgan Stanley over the past few weeks, partnered with Dynasty to set up independent companies. Breakaway teams managing a total of about $25 billion now use Dynasty’s platform, the New York-based firm said.

“Somebody who has a business of that size isn’t going to take a significant risk and hope it works out,” Dynasty Chief Executive Officer Shirl Penney said in an interview. “A lot of those teams wanted the road to independence to be a little more well-traveled.”

Billion-Dollar Drain
Dynasty helped wealth teams from four big banks go independent since last July

For a company the size of Bank of America, which has seen three teams overseeing a total of about $3.9 billion depart for Dynasty in the past 10 months, the losses are relatively small. The Charlotte, North Carolina-based bank’s wealth-management businesses have $2.8 trillion in client assets.

“Attrition rates among experienced advisers remain near historic lows, at approximately 3% per year,” Bank of America spokesman Matt Card said in a statement, adding the firm “offers an unrivaled platform and the full range of capabilities advisers need today to serve” clients.

Retention Rate

Still, the migration from big banks is expected to continue as improvements in technology and the growth of turnkey companies like Dynasty, Chicago-based HighTower Advisors and Focus Financial Partners make it easier for teams to set up their own businesses. Independent and hybrid investment advisers will likely make up 28% of the market by 2020, compared with 25% in 2015, according to analytics firm Cerulli Associates.

How the breakaway teams fare financially is based largely on whether or not their clients follow, said Alan Johnson, managing director of compensation consultant Johnson Associates. Advisers who left big firms to start boutiques retained about 87% of their client assets on average, a Schwab survey found.

“If you think you can keep all of your clients, then of course you’re going to make more money," Johnson said. "The real question is how many clients are you going to lose?”

Banks have become more aggressive in trying to retain wealth advisers, making hard-to-refuse offers to top producers, Johnson said.

“It goes on all the time,” he said, but added, “You have hundreds of these people and you can’t cut deals for everybody.”

‘Hot Summer’
Jeff Erdmann, who leads a team for Bank of America’s Merrill Lynch wealth-management business, said that he’s never considered going independent.

“If you’re completely on your own, you’re trying to reinvent an incredible machine,” said Erdmann, who is based in Greenwich, Connecticut. “Having the association with a large global bank gives security to families.”

Penney said independent advisers on Dynasty’s platform typically see 25% to 40% more in average cash flow than at big banks. “They own all the equity in the business, so they own all the upside as well,” he said.

Penney declined to say how many other teams are poised to jump.

“We’re going to remain busy,” he said. “We’re going to have a hot summer.”
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December 21, 2018

Charitable Giving in the Face of Tragedy
Wealthmanagement.com

By Jeremy Zoladz ‘Tis the season of giving. From red kettles to toy drives, there are reminders everywhere—the spirit is in the air. With the recent natural disasters and an increased awareness of social issues, many have been moved to possibly give even more than the record $410 billion in 2017 (according to Giving USA). Planned or unplanned, how do your clients give more tax efficiently? After all, this results in more [...]

December 20, 2018

Warning for Wirehouse FAs: So-Called Sunset Agreements Aren’t Always in Your Best Interest
Financial Advisor IQ

It’s no secret that wirehouse firms want to keep their advisors captive. Protocol departures, shoring up non-solicitation agreements, deferring compensation, and mandating garden leave for those who choose to move to a competitor are strategies designed to stave off attrition. [...]

t’s no secret that wirehouse firms want to keep their advisors captive. Protocol departures, shoring up non-solicitation agreements, deferring compensation, and mandating garden leave for those who choose to move to a competitor are strategies designed to stave off attrition.

And, taking things another step further, more than ever, these firms are encouraging advisors — young and old — to sign on to their succession programs. This is essentially asking advisors to commit the next decade or more to the firm — selling off their businesses and clients at the same time.

Agreeing to spend significant time in place is a decision not to be taken lightly — especially at a time when the landscape of the industry continues to evolve and brokerage firms are doing everything they can to gain as much control of their advisor force as possible.

For the advisor nearing retirement or the next gen given the opportunity to take over a significant book of business from the retiring advisor, these so-called “sunset programs” can be win-win situations — provided all are confident their firm is the right place for key stakeholders and they are willing to accept any and all changes that come down the pike.

But the fact of the matter is these agreements further bind the next gen and their clients to the firm, without control or choice — the net effects of which often include the following:

Cash payments can be deferred for at least five years after the senior advisor retires.
The next gen loses optionality and value, especially if they are bound by a garden leave, making client portability significantly more challenging.
As more advisors are tied up by their firms, the more expensive they become to recruit, and the less enterprise value their businesses have overall.
Client attrition can increase, alienated by being sold to the firm without their knowledge or permission.
And perhaps most strikingly, these retiring advisor programs have the potential of turning a wirehouse advisor — who has control over his business and the way clients are served — into a private banker who serves at the discretion of management, without ownership or control over his business.

These efforts to transform “free-will” advisors into “captive” employees could create a new generation of “stuck” advisors who have little control and far less autonomy — shifting the balance of power from the advisor to the firm and limiting any leverage the advisors have.

For both the advisor looking at a sunset program and the next gen in line, it’s important to recognize that alternatives exist in which the senior advisor can still monetize their life’s work while allowing the successor to retain a more certain level of control over their future.

The alternative that represents the path of least resistance would be to move to another wirehouse -- which may enable everyone to take chips off the table, but would likely put the next gen in a comparable “employee status” role, with all the limitations attached to it.

Regional and boutique firms are valid alternatives for advisors who still want to be employees. These firms tend to be less bureaucratic and heavy-handed than their wirehouse counterparts and are often the right option for advisors who are not interested in being business owners.

For those who do want to be business owners and have maximum control, the RIA space has gained mainstream validation as an option for advisors of all sizes, especially those managing assets in excess of a billion dollars.

While concerns over the work involved with building a firm deterred many from exploring independence in the past, an entire cottage industry born to support breakaways has emerged, with service providers and custodians making transitions and start-up easier than ever before. Plus, many sources of capital have flocked to the space for those who want to capitalize early on or buy down equity over time.

The RIA space offers key benefits for advisors, their businesses and clients, including:

More customization, freedom, ultimate control, and the flexibility to retire when and how the advisor desires.
The ability for an advisor to build a legacy and equity, the latter of which can be monetized at a higher multiple with more favorable tax treatment. (Multiples of EBITDA range from five to nine times on RIAs, dependent upon size, predictability of revenue, and growth rates.)
Clients benefit by access to superior technology solutions and more choice, as RIAs can shop the whole of the market.
Right now, it’s a seller’s market where advisors hold all the cards, but if the scale tips — and the balance of power shifts to the firms — this paves the way for firms to deploy more draconian control tactics — such as capping advisor comp or going to salary-bonus altogether.

All wirehouse advisors — whether signing these succession agreements or not — need to pay attention to the writing on the wall. As more advisors become captive, the less leverage, optionality and control the entire advisor population will have.

By all means, no one should allow complacency or inertia to drive the process — now is the time to wake up and regain control.

December 19, 2018

Advisor Shortage? What Advisor Shortage?
Financial Advisor IQ

Excuse me, did Todd Thomson just say there too many financial advisors, not too few? Puncturing one of the RIA industry’s most widely-accepted axioms, the Dynasty Financial Partners chairman did indeed make that assertion at the recent MarketCounsel Summit in Las Vegas. Contrary to ominous reports of a talent shortage, Thomson said, too many advisors are serving too few clients. [...]

Excuse me, did Todd Thomson just say there too many financial advisors, not too few?

Puncturing one of the RIA industry’s most widely-accepted axioms, the Dynasty Financial Partners chairman did indeed make that assertion at the recent MarketCounsel Summit in Las Vegas. Contrary to ominous reports of a talent shortage, Thomson said, too many advisors are serving too few clients.

Conventional wisdom has held that as advisors get older and retire, too few younger people are taking their place, leaving the industry with a dearth of talent.

But Thomson pointed to a report by Cerulli Associates showing that 72% of the over 18,000 independent advisory firms (many of them solo practices) have assets under management under $100 million. However, the combined assets of those advisors only account for 7% of total industry assets.


 
Dynasty Financial Partners Chairman Todd Thomson discusses RIA myths at the MarketCounsel Summit in Las Vegas.Jab Buhay, Life In Vegas Photography

Meanwhile, according to Cerulli, 60% of RIA assets are held by firms with over $1 billion in AUM, yet those assets are serviced by less than 4% of advisors. What’s more, 73% of all RIA assets are held by advisory firms with between $500 million and over $1 billion in assets.

“All [those] firms have to do is increase the assets they manage by less than 10% and you literally wouldn’t need any of the [smaller] firms,” Thomson said in a subsequent interview with Financial Planning.

Thomson made clear that he didn’t think solo practices would or should go out of business. “I’m not suggesting that there won’t be an ongoing role for smaller firms,” he said.


Quote"We have way more firms than we need," says Dynasty Chairman Todd Thomson.
But Thomson did point out that as larger firms continue to grow and leverage professional management, scale and technology — not to speak of the coming artificial intelligence revolution — they will be able to absorb more and more clients.

“There’s plenty of capacity in the industry to absorb that migration,” the Dynasty executive maintained.

As a result, “we certainly don’t have a crisis of not enough talent,” said Thomson, who was CEO of Citigroup’s Global Wealth management division before co-founding Dynasty 10 years ago. “Instead, we have way more firms than we need.”

To be sure, Thomson’s comments should be taken with a grain of salt. After all, it’s in Dynasty’s self-interest to boost large firms who are the platform provider’s clients.

Nonetheless, the facts Thomson cites are real, forcing the industry to re-examine a heretofore unchallenged shibboleth: Are there really too few advisors? Or too many?

December 13, 2018

Most Indie-Bound FAs Want to Transition by 2020
Financial Advisor IQ

More than half of advisors planning on going fully independent would like to transition between 2019 and 2020, according to Charles Schwab’s Spectrum of Advisor Independence Study, released Wednesday. A further one-third of surveyed advisors are keen to break away after 2020, the study notes. And a vast majority of advisors say they are interested in independence for the increased freedom and control it affo [...]

More than half of advisors planning on going fully independent would like to transition between 2019 and 2020, according to Charles Schwab’s Spectrum of Advisor Independence Study, released Wednesday. A further one-third of surveyed advisors are keen to break away after 2020, the study notes. And a vast majority of advisors say they are interested in independence for the increased freedom and control it affords their businesses, the study reveals.

Gaining control of an advice practice was a main reason David Jumper, partner of $846 million HPM Partners, left Deutsche Bank for independence, he says. Jumper has equity interest in HPM Partners, and this creates incentive to “want to see the firm grow and prosper,” he says. At the big banks and broker dealers, that incentive just isn’t present, he suggests.

Yet the search for higher pay and prospects of career improvement are also key drivers for advisors moving to independence. For Jumper, the prospect of career advancement factored into his exit from Deutsche Bank.

“Knowing that I have a long runway in front of me was very important in my decision to go to HPM Partners” he says. Going to an independent RIA can even create incentive to help another struggling partner because “the rising tide lifts all boats,” he claims.

But not every advisor wants independence. Advisors may be forgoing independence because of a lack of understanding of what independence might truly bring, the study’s authors suggest.

One-third of advisors choosing not to go independent forgo breaking away because they are uncertain about the benefits of the RIA model, study data reveals. The study also shows more than 20% of advisors avoid independence because they are not confident their clients will follow.

Speaking with FA-IQ at the Charles Schwab conference in Washington, D.C., Shirl Penney, CEO of Dynasty Financial Partners, shares his insights into the movement towards independence and how it may continue to develop... 
(Click link to view video)

November 29, 2018

Drive growth today and be positioned to thrive in future markets
Investment News

Recent market volatility may have just done you a favor. It's a potent reminder that the bull market is long in the tooth. Hopefully, all of this volatility has you asking yourself: Is your business prepared not only to weather a prolonged market slowdown, but to thrive in it? Chances are, if you're not built to thrive — to achieve exponential growth — today, yo [...]

Drive growth today and be positioned to thrive in future markets
 
6-7 minutes

Recent market volatility may have just done you a favor.

It's a potent reminder that the bull market is long in the tooth. Hopefully, all of this volatility has you asking yourself: Is your business prepared not only to weather a prolonged market slowdown, but to thrive in it?

Chances are, if you're not built to thrive — to achieve exponential growth — today, you're not going to thrive in a changing market. In fact, your very survival could be threatened.

Chief executive officers of RIAs who design their firms for sustained and consistent growth today could actually benefit from a market slowdown. These firms have focused on building clearly defined competitive advantages. They provide client experiences that go far beyond expectations; they have the people, tech-enabled processes and overall positioning in place to win and retain coveted clients today, and they will be ideally situated to capture market share from weaker competitors when the markets change. It's conceivable that these well-positioned firms could grow faster in a downturn than they do today. It's the age-old story: survival of the fittest.

The country's most successful RIAs aggressively address any issues that could constrain their growth. They operate at high efficiency and enjoy the benefits of exponential growth. As importantly, they have a plan for the future and are prepared to seize the opportunity that a changing market, even a prolonged slowdown, might present.

Here are the issues most successful RIAs have addressed to achieve exponential growth and profitability now and position themselves to lead tomorrow.

1. Build an organizational structure to unleash growth. Too many RIA CEOs are trapped by day-to-day responsibilities. They are typically the firm's rainmaker, but they are so overwhelmed with running the company they have a very low return on time — and that means no time to help drive growth.

Successful firms institute structures that free leadership to power growth, including clearly defined roles and responsibilities for the internal team, which is segmented into three core groups: Finders (those who directly contribute to increasing revenue), Minders (those who deliver your services and tend to your clients' needs) and Grinders (the back-office backbone of your organization).

In addition, growth-oriented firms enhance their overall resources — while keeping payroll costs in check — by outsourcing roles that are either too expensive or hard to fill. These include many C-suite roles, such as CFO, chief marketing officer and chief compliance officer.

Finally, CEOs at high-growth firms benefit from being part of a network of like-minded RIAs. Having other RIA teCEO peers to connect with who understand the challenges and share ideas and best practices can be very rewarding.

2. Become tech-enabled. Technology is so critical to everything you do it often feels as if you're running a tech start-up, not an RIA. The truth is, technology provides the tools to propel your growth and productivity while giving you the competitive advantages you need to raise your client experiences to new heights.

Unfortunately, technology is also often the greatest obstruction to growth. Many RIAs use Band-Aid fixes — or worse, add staff and create manual processes, the antithesis of their tech goals — to address shortcomings in their platforms.

RIAs that are growing at a rapid pace and are positioned to achieve greater efficiencies in a downturn have tech-enabled all aspects of their business, from operations, compliance, investments, marketing and finance to the client experience. Their technology is integrated so detailed information about each client is at their fingertips. They also give clients access to their accounts through online portals, especially mobile apps. If you don't have an app in Apple's App Store, you are at a competitive disadvantage.

3. Build a clear business plan and track it. RIAs driving profitability and growth make the time to create annual plans that include one-, three-, and five-year business initiatives so they can understand how and where to use their capital to achieve the greatest ROI.

Your business plan should address at least six areas that are critical to your profitability and growth:

• Building your brand

• Your client experience

• Your investment process

• Your business development process

• Streamlining your operations

• Refining your service model

Each area needs clear objectives and tactical steps. Progress should be measured throughout the year and shortcomings addressed promptly. As importantly, the plan needs to be flexible to accommodate changing conditions, with a Plan B in case market challenges emerge.

4. Access capital and retain control. Right now, there's an abundance of capital chasing the RIA market. As you seek to drive growth — either organically or through M&A — you're going to need to tap into this capital. Before you do, ask yourself: How much control are you willing to give up in return for capital? And which sources of capital will exert the most pressure on you and your organization should times and markets change?

The source of capital that typically seeks the most control is private equity, as they often require board seats and have their own exit goals that may not align with yours.

The best source of capital is one that gives you various financing options to suit your needs plus the freedom to use the capital at your discretion. These capital sources won't insist on board seats or any control of your organization; they don't have an exit plan to achieve; and they are flexible enough that they won't force you into making uncomfortable decisions in the event of a downturn.

Shirl Penney is president and CEO of Dynasty Financial Partners.
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December 22, 2017

Breakaway Advisors Absolutely Love Their Independence
Financial Advisor IQ

It’s almost comical. One hundred percent of former wirehouse or regional-brokerage advisors in the independent RIA channel are happier for having made the move. That’s according to a blind survey of 450 FAs by Dynasty Financial Partners — a sponsor that, as an infrastructure provider to breakaway RIAs, has to be pleased with the result. [...]

It’s almost comical. One hundred percent of former wirehouse or regional-brokerage advisors in the independent RIA channel are happier for having made the move. That’s according to a blind survey of 450 FAs by Dynasty Financial Partners — a sponsor that, as an infrastructure provider to breakaway RIAs, has to be pleased with the result.

 Indeed, Dynasty’s CEO Shirl Penney says the survey confirms “advisors who choose independence are happier, less stressed and better able to serve their clients.”

Supporting this claim, no less than 96% of those polled think they “have greater upside” in their “earning opportunity” as a result of going independent; 96% say they now “have the ability to realize their business vision;” 93% agree they “have greater opportunity to build equity value;” and 93% reckon they “have more control over important business decisions.”

And the big numbers keep coming. Eighty-two percent of ex-wirehouse FAs now in RIAs say the transition is directly attributable to their ability to “provide conflict-free advice," and 72% believe their independence “allows them more freedom to focus on clients’ unique needs,” according to Dynasty’s Independent Advisor Survey.

Of course poll outcomes like that are bound to raise eyebrows. So we asked some breakaway advisors for their views on the lopsided feedback their peers provided in the Dynasty survey.

All we got was confirmation.

“We’re much happier at Summit Trail,” says Jack Petersen, a co-founder and managing partner of Summit Trail Advisors, a New York-based RIA with regional offices in San Francisco, Chicago, Boston and Chevy Chase, Md. “It was stressful in the first six months” after the firm’s mid-2015 launch, he admits. “But after that we started hitting our stride.”

Of Summit Trail’s 39 employees, Petersen says “34 of us came out of the wirehouse world,” so he figures the firm, which manages about $5.5 billion — including about $1 billion brought in this year organically — has a keen sense of what it’s like providing financial advice in different business models.

The biggest strike against major brokerages like Morgan Stanley, Merrill Lynch and UBS Financialcomes down to “the law of large numbers,” says Petersen, who began his career with Morgan Stanley before joining Lehman Brothers’ wealth management division and its post-meltdown successor unit at Barclays. “That’s no one’s fault: they have to make sure they’re protecting the firm by creating consistent policies and procedures.”

Though that’s a prudent course for trillion-dollar companies, it’s tough to provide truly customized services from a monolithic platform. Working from an RIA, however, allows for such tailoring, which Petersen sees as necessary to providing fiduciary services.

Advisor Blake Pratz, who left UBS early this year to co-found Houston-based Icon Wealth Partners, which manages about $650 million, agrees with that assessment.

Further, says Pratz, the Dynasty survey result of 100% agreement among breakaways that they’re in better boats now is nothing to wonder at given conditions at the wirehouses — “whether you want to look at compensation, the fact they’re devoid of cultural spirit or the fact that management there is out of reach.”

And though at breakaways the peripheral parts of life at a wirehouse might be missed — for example, some aspect of a particular reporting interface — Steve Schwarzbach, who left Morgan Stanley with FA Mark McAdams to co-found Icon with Pratz, says “You don’t make this kind of move if you’re going to focus on minor details.”

Rather, says Schwarzbach, “You do it because you have a strong feeling you’re going to make more money and you’re going to serve your clients better.”

And when an advisor puts their career on the line and takes action on that belief only to see it confirmed, the result is a surge of relief and happiness. “That’s what I think the survey points to,” says Schwarzbach.

“But,” cautions Pratz, “that doesn’t mean there aren’t frustrations” that come with independence. “That could be the two clients you thought of as sure things hesitating to follow; it could be the Friday morning call saying the system is down and you’re responsible for getting it back up.”

For all that, though, running your own firm means you’re likelier to head home at the end of the workday having given “good advice, and solved problems for clients,” according to Pratz. “You feel re-engaged, like you’re part of something bigger, and you can see it in your clients’ reactions and responses.”

Summit Trail’s Petersen understands that feeling. Since going independent, he says he’s “never been this excited to come into work every day.”

The unanimity on that score among breakaways reflected in the Dynasty survey makes sense to Jeff Spears as well. The president and head of wealth management at Fort Point Capital Partners in San Francisco used to run Sanctuary Wealth Services, a Dynasty-like support-service provider to independent RIAs.

Ex-wirehouse advisors who have joined or started RIAs “are happy to not be associated with the brand and management of their old firm,” Spears tells FA-IQ.

For some FAs, especially at a certain level of seniority, being tied to a big brokerage is simply a drag on business, Spears explains. Continuing in the relationship past that point exacts an “emotional toll” on advisors who stick it out. Conversely, advisors who go independent at that stage are apt to feel relief and happiness as their employer-related stress diminishes, he adds.

December 21, 2017

WSJ Wealth Adviser Briefing: Taxes and Independence, Adviser Profile, Secrets Podcast
WSJ

The tax overhaul is likely to give brokers a new incentive to leave traditional Wall Street firms in favor of going independent and setting up their own shops, says Rudy Adolf, head of Focus Financial Partners, a firm that helps advisers make that transition. As employees of a firm, “advisers pay ordinary rates–t [...]

Read the full storyhere

December 15, 2017

Behind Discount Brokers’ Boom: Advisers, Not Day Traders
The Wall Street Journal

Charles Schwab and TD Ameritrade rake in client assets, catering to wealth managers and reinvigorating their businesses [...]

Business is booming for discount brokerages.

But this time the players driving the boom aren’t day traders chasing dot-com riches. They are independent financial professionals known as registered investment advisers who manage rosters of typically affluent clients and trade on their behalf with the assets held at the brokerage firms.

By catering to these wealth managers, the brokerages have reinvigorated a business that was racked by the tech-stock bust at the beginning of the century and the financial crisis. Two of the firms leading the way in serving these customers, Charles Schwab & Corp. and TD Ameritrade HoldingCorp. , have pulled in about $200 billion combined in net new assets this year, most of which has come from the independent advisers, according to the companies. Smaller rival E*Trade FinancialCorp. made a recent acquisition to better tap this business.

 While the discount brokers have long served independent advisers, the business has picked up in recent years. “Firms that set up custody businesses for financial advisers are reaping the benefit,” said Devin Ryan, managing director at JMP Securities LLC, as independent advisers “have been the fastest-growing area of the wealth-management industry.”

The boom underscores two trends that have been upending the wealth-management sector in recent years: The first is a wave of traditional brokers leaving firms like Bank of America Corp.’s Merrill Lynch and Morgan Stanley as they seek to keep more of the fees and commissions they generate, and to maintain greater control over their business and less pressure to market certain types of products, from proprietary funds to credit cards to mortgages. The second is a new federal retirement-saving regulation, known as the fiduciary rule, aimed at curbing conflicted investment advice that has forced traditional brokers to retool their business models.

By 2020, research firm Cerulli Associates predicts that independent advisers will control more assets than Merrill Lynch, Morgan Stanley, UBS Group AG and other major brokerages combined.

Matthew Celenza, an independent financial adviser in Los Angeles, is among the converts. Mr. Celenza this year launched his own wealth-advisory business, Boulevard Family Wealth, with about $1 billion in assets after a six-year run with Merrill Lynch’s private banking and investment group. “Going independent gives us better positioning in the business,” Mr. Celenza said when he left Merrill in July.

 

Yet without the infrastructure provided by a traditional brokerage, finding a place to keep clients’ money was one of the first things Mr. Celenza had to do upon going independent. He went with Schwab and estimates that his clients save 0.15% to 0.20% in annual fees now that their assets are held at the discount brokerage versus his former firm.

“I know the perception is that Schwab is a discount brokerage,” Mr. Celenza said, but “they offer every service a large brokerage service would.”

Schwab CEO Walt Bettinger said in October that his firm has logged substantial increases in the number of advisers, up 35%, and assets coming over from broker-dealer firms. At Ameritrade, which ended its fiscal year in October, new client assets on the adviser side surpassed last year’s results by more than 50%, CEO Tim Hockey said in October, marking a record year for asset gathering.

Executives and analysts say the trends behind the discount brokerage boom are poised to continue, thanks in part to an increase in consumer awareness about the impact of investment fees and the differences between brokers and advisers. Registered investment advisers have for decades been required to put clients’ interests first and typically charge fees, while brokers have operated under a standard in which they could recommend products that would pay them the most in commissions as long as the investment was deemed suitable.

“Fee-based, fiduciary models are the fastest growing areas of the industry,” said JMP Securities’ Mr. Ryan, and “there’s massive market share opportunity” for “firms that set up custodial businesses for [independent advisers] and are reaping the benefit.” He said the four big custodians—Schwab, Ameritrade, Fidelity Investments and Pershing, a unit of Bank of New York Mellon Corp.—have about 50% of the market for independent advisers and they continue to make inroads as they invest in their platforms.

Schwab and Ameritrade both attribute their strong net new asset growth largely to independent adviser clients. In the latest quarter, Schwab said core net new assets climbed 72%, or $51.6 billion, from a year earlier, while Ameritrade reported $19.9 billion in net new assets for the period, a 32% year-over-year increase. For Schwab, assets brought in by independent adviser clients rose by more than two-thirds; Ameritrade said such money accounted for about 80% of its net new asset growth.

Meanwhile, E*Trade Chief Executive Officer Karl Roessner said during the company’s latest earnings call in October that E-Trade has been losing assets to independent firms, among others, and handles just about 10% of customers’ investible wealth. “Accordingly, we have been searching for the optimal way to approach this population,” he said on the call in discussing a deal to buy a custodian firm.

Observers say the discount brokerages are poised to gain more share of investor dollars as the independent adviser ranks expand. Dynasty Financial Partners, a firm that supports independent advisers and helps them break away from brokerages, has brought more than $25 billion in assets to firms, including Schwab and Fidelity, said CEO Shirl Penney. “The lifeblood is assets, and they’re going one way, to the [independent adviser] space,” he said.

December 13, 2017

Biggest recruiting moves in 2017
Financial Planning

It was a big year for recruiting moves. Nearly two dozen mega teams ― those managing $1 billion or more in client assets ― switched employers in 2017, according to hiring announcements. [...]

It was a big year for recruiting moves. Nearly two dozen mega teams ― those managing $1 billion or more in client assets ― switched employers in 2017, according to hiring announcements.

That's double the figure for 2016, though about on par with 2015.

The moves this year represented more than $43 billion in client assets and reflect the upheaval transforming the recruiting landscape. Three of the wirehouses have cut back on hiring efforts. Meanwhile, UBS and Morgan Stanley have exited the Broker Protocol ― which spurred a raft of advisor departures. Though nearly all of the mega teams left wirehouses, almost none joined another wirehouse. Instead, they formed independent firms or joined smaller regional brokerages, which have been on a recruiting tear this year.

RBC, Baird, Dynasty Financial Partners and J.P. Morgan Securities, a small boutique wealth management unit, were among the big winners.

Though these and other firms are ending the year on a strong note, 2017 did not start out promising, according to recruiters.

Uncertainty around the fiduciary rule and the Trump administration's intentions with regard to the controversial regulation spurred many advisors to stay in a holding pattern.

"People were really understandably leery about joining a firm and not knowing what their policy on retirement accounts would be because that was kind of a work in progress," Mark Elzweig, a recruiter and On Wall Street contributor, says.

The breakaway advisor movement also picked up steam this year, in part because of the success past breakaways have had.

"We've seen teams that are going independent now are larger than they ever were before," says recruiter Louis Diamond. "It's partly because of the validation of other groups that have done it, the advancement of platforms and introduction of service providers in the space like Dynasty and Hightower that have enabled it to be so."

Although the Broker Protocol's future may be in doubt, advisor moves will likely continue because the reasons brokers want to switch firms haven't changed, according to industry insiders.

To see where the industry's biggest teams went in 2017, read the below article: 

https://www.financial-planning.com/slideshow/biggest-advisor-recruiting-moves-in-2017

December 08, 2017

What advisers should consider before taking a capital infusion
Investment News

Many RIAs have access to external cash, but should be clear on how that money would be used and the motivations and time line of the investor [...]

Advisory firm valuations might be nearing a top, but advisers should not expect the appetite for investing in their businesses to drop off anytime soon.

 
"Our industry is all of a sudden very fashionable, and we are awash in capital," said Rich Gill, partner at Wealth Partners Capital Group, during a panel discussion Wednesday at The MarketCounsel Summit in Miami.

"What's really important is understanding the motivations of the capital and their time lines," he said. "If you think you're going to need capital down the road, I would start educating yourself now to be more prepared when the right time comes."

Mr. Rich was joined on the panel by Marty Bicknell, chief executive of Mariner Wealth Advisors, and Shirl Penney, president and chief executive of Dynasty Financial Partners.

Access to capital for registered investment advisers can come in many forms, including both debt and equity financing, and from private-equity investors or a longer-term partnership.

Mr. Penney said the primary reasons an RIA considers outside capital are ownership diversification, to invest in the business, to make acquisitions and to finance succession planning.

But whatever the reason, the panelists stressed being as informed and prepared as possible before entering into any kind of capital agreement.

"You have to understand what the motivation is of the outside investor," Mr. Penney said. "And the best time to raise capital and sell a piece of your business is when you don't have to."

In other words, if you're desperately seeking a capital infusion, you are putting yourself at a disadvantage.

 
In terms of preparation, which Mr. Gill said should begin at least three years before actually taking outside capital, the idea is to make an RIA presentable but also in a position to stand up to strict scrutiny from potential investors.

"Think about professionalizing your organization," Mr. Bicknell said. "If I can't see a bench, then I worry about my risks. A strong organization built around a strong leader tends to push me to the higher end of the valuation range."

Mr. Penney advised establishing a board of outside directors to help guide the process.

In terms of valuations, panelists agreed that assets under management is not the biggest factor.

"Growth and scale are key elements of valuations, but the other thing is people," Mr. Gill said. "You can't have a situation where if a person gets sick for two weeks the business comes to a screeching halt. You need a next generation of advisers, operational staff and professional folks. As an industry, not enough firms have made the necessary investments or the necessary partnerships."

For RIAs just starting to consider outside capital, the good news is, there is plenty of time to get ready.

"Regarding the opportunity for capital wanting to come to this business, there's plenty of runway and it will be around for years," Mr. Bicknell said. "But I do think valuations have run a little too high."
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December 20, 2016

ICONS IN THEIR OWN WORDS …

Shirl joins an impressive group of Icons & Innovators in discussing their aha moments and what they led to. [...]

December 19, 2016

Shirl Penney Named To InvestmentNews Icons & Innovators
Investment News

Before founding Dynasty Financial Partners in 2010, president and CEO Shirl Penney spent 18 months doing a listening tour. [...]

Before founding Dynasty Financial Partners in 2010, president and CEO Shirl Penney spent 18 months doing a listening tour.

He had observed an accelerated trend of wirehouse advisers with ultrahigh-net-worth clients outgrowing their platforms and going independent. He saw an opportunity.

After meeting with about 50 registered investment advisers, along with custodians and turnkey asset management providers, Mr. Penney came away with a thesis: Advisers are asking for simplicity and integration.

His answer to that need was Dynasty, an integrated platform company focused on the specialized needs of top RIA firms across the country. 

“Our innovation was to aggregate a community of like-minded RIAs into a large buying unit, similar in size to an institutional investor,” Mr. Penney, 40, said. “This enables connectivity across the whole industry to get more choice, with access to products for their level of need, along with our proprietary technology.”

A major focus of the company is to enable advisers to offer conflict-free advice and collaboration. In six years, the company has grown to about 40 members with more than $25 billion in assets under management.

Mr. Penney, who launched his firm at age 34, displayed a fearlessness and drive that sprang from living in poverty as a child.

Raised by his step-grandfather in rural Maine, Mr. Penney was homeless from age 11 through 12. He persevered, making it to college and then Wall Street.

“Despite what people told me, I had a belief in myself and wanted to live a life that would make my grandfather proud,” he said. “When you go to bed cold and hungry, that’s a motivator.”

– Deborah Nason

December 14, 2016

PODCAST INTERVIEW WITH SHIRL PENNEY, CEO OF DYNASTY FINANCIAL PARTNERS
RIACast

On this episode, we gain insight into Dynasty Financial Partners through our conversation with its CEO and Co-Founder, Shirl Penney. [...]

Listen Here: http://riacast.com/episode-8-interview-with-shirl-penney-ceo-of-dynasty-financial-partners/

Among other topics, Shirl and Matt discuss: 

  • Dynasty’s service model
  • Shirl’s predictions about a Trump administration’s impact on the RIA space
  • Why Dynasty offers its employees equity
  • The biggest challenges facing Dynasty
  • What the best advisors are doing differently
  • Shirl’s charitable passions and interest in thoroughbred racing

November 30, 2016

DOL Rule Pours Gas on RIA Movement Fire: Dynasty CEO

Hi, I'm Danielle Verbrigghe, reporter with Fundfire. I'm here today at the Schwab Impact Conference in San Diego with Shirl Penney, president and CEO of Dynasty Financial Partners. In the broker-dealer space, firms are facing a lot of change right now with the implementation of the DOL fiduciary rule, which is set to go into effect in April initially. How do you expect that to affect the RIA chann [...]

November 23, 2016

Trump's Tax Plan Threatens to Soften SMA Sales Pitch
Fundfire

Lower tax rates for top earners could soon be a reality, with president-elect Donald Trumppoised to take on the presidency and Republicans controlling both houses of Congress. While welcome news for some wealthy investors, the prospect could prove a headwind for separately managed accounts (SMA) strategies focused on tax efficiency, industry sources say. [...]

Lower tax rates for top earners could soon be a reality, with president-elect Donald Trumppoised to take on the presidency and Republicans controlling both houses of Congress. While welcome news for some wealthy investors, the prospect could prove a headwind for separately managed accounts (SMA) strategies focused on tax efficiency, industry sources say.

Tax-friendly strategies, such as tax-managed equity and municipal bond strategies, have been amongst the fastest growing parts of the SMA industry in recent years. Indeed, SMA managers have touted the tax loss harvesting capabilities of the vehicle as a key selling point. Unlike a mutual fund, investors own the underlying securities within an SMA, allowing them to write off losses at the individual security level. 

In fact, more than two-thirds of financial advisors surveyed by FundFire for a recently released research report, said that they used SMAs for tax management. Of those who did, 46% said they performed tax loss harvesting themselves, while 26% used a tax management overlay, and another 28% said they relied on an SMA manager for tax management techniques. 

But tax efficiency could become a less effective selling point for SMA managers if the new Republican administration follows through with proposed plans to effectively lower the top short- and long-term capital gains rates, says Ryan Nauman, market specialist at Informa Investment Solutions.

“SMAs really benefit because of the tax efficiencies that they offer,” Nauman says. “So with lower taxes, that would reduce some of the demand and that would be the biggest drawback or side effect of the new president and new policies [on the SMA industry].”

The incoming president has proposed lowering the top effective tax rate, which also applies to short-term capital gains, to 33% from 39.6%, and eliminating the net investment income tax, which would essentially lower the top effective long-term capital gains rate to 20% from 23.8%, when including that tax. 

“I think the demand for municipal SMAs or those tax managed SMAs could definitely decrease if Trump gets his proposed new tax brackets passed,” Nauman says. 

But other industry sources say that even with lower taxes, they wouldn’t expect demand for tax-efficient SMA strategies to abate.

Even if tax rates go lower, “the fact is we’re still going to have death and taxes, so tax efficient strategies are still going to be in vogue,” says Bill Kennedy, CIO of Fieldpoint Private.

“The ability to compound wealth over a market cycle, and certainly over generations, is very dependent on the after-tax rate of return,” Kennedy says. “Ensuring that is optimized is very important when the statutory tax rate is at 39%. It’s still equally important if the statutory rate is 33%.”

“Philosophically, what’s critical here is not whether it’s higher taxes or lower taxes,” Kennedy says. “It’s that after-tax [and after fee] return a manager can generate. We don’t think the emphasis on tax optimization will decline.”

The 33% short-term and 20% long-term top capital gains rates under Trump’s plan would be comparable to the Bush tax cut era, when short-term gains were taxed at 35% and long-term gains were taxed at 15%. That period still experienced high-demand for tax management strategies, explains Rey Santodomingo, director of tax managed equities for Parametric Portfolio Associates.

The fact that investors could be left with more money to invest, due to less going to taxes, could be a boon to asset managers, Santodomingo says. 

“It might actually free up more assets to flow into these index-based strategies, because some investors might look at the lower tax rate as an opportunity to diversify out of stocks they’ve been holding onto for a while,” Santodomingo says. 

In addition, increased market volatility could provide more opportunity for tax loss harvesting, which could be a boon to tax-managed equity SMAs, Santodomingo says.

“Trump has been calling for change, and I think change will kind of translate to volatility in the market as the plan unfolds,” Santodomingo says. “If there is market volatility, then tax managed strategies are a great way to take advantage of that volatility [through] systematic loss harvesting.”

The other area in the SMA market that has benefited from wealthy investor interest in managing tax exposures is municipal bond strategies. Municipal bond SMA strategies had grown to represent 33.7% of the overall SMA industry assets in the first quarter of 2016, compared to just 10% in 2007, according to data from the Money Management Institute(MMI) and Dover Financial Research. And municipal bond SMAs have continued to gain strong flows this year, with municipal bond SMAs tracked by Informa netting nearly $12.9 billion in net flows year to date.

And while high tax rates have benefitted municipal bond SMAs, the prospect of lower taxes may not be enough to cause wealthy investors to pull back from the asset class, observers say.

When it comes to municipal bonds, tax rates are not the only factor that matters, Kennedy says.

“I think there’s a false assessment that it’s really the tax rates that drive munis, when in fact it’s really default risk and liquidity risk that drive munis and help to explain why munis trade at a premium or discount to treasuries,” Kennedy says.

The new administration’s policies may not be all bad news for municipal bond SMAs, Kennedy says. 

“While lower tax rates may prove to be a bit of a headwind for munis, there are other things about the new administration’s plan that could be potential tailwinds,” Kennedy says.

He points to the proposal to repeal Dodd-Frank, which could inject more liquidity into the municipal bond market. In addition, the prospect of potentially higher economic growth, and a proposed tax holiday that could encourage corporations to repatriate profits held offshore, could be credit positive factors for municipal bonds, Kennedy says.

Lower taxes could be a potential headwind to tax efficient equity and municipal bond SMA strategies, but demand is unlikely to evaporate completely, as individuals in the top bracket will still likely look for tax efficiency, says Nauman, of Informa.

And other factors, such as the impending Department of Labor (DOL) fiduciary rule, could also help offset any reduced demand for tax management capabilities, Nauman adds.

“The DOL regulation could offset some of that weakened demand, as some financial advisors look to SMAs to outsource the investment management process,” Nauman. Despite speculation that the Trump administration may attempt to roll back the DOL fiduciary rule, and other regulation, it seems unlikely that the rule will be completely scrapped, Nauman says.

In addition, the money investors may save on taxes could be put back to work benefiting mangers.

“That extra money that investors are saving by not having to pay taxes could go to investing in other assets, other SMA strategies,” Nauman says.

Regardless of where tax rates end up, advisors should increase their focus on considering after-tax results, says Scott Welch, CIO of Dynasty Financial Partners.

“Tax efficiency should be paramount,” says Welch. “You can’t control the market, but you can control fees and taxes.”
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December 28, 2015

Breaking Free: 8 Best Practices for Advisors Seeking Independence
Financial Planning, Written by Shirl Penney

At Dynasty, our most successful transitions were executed with advisors who had done exhaustive due diligence before deciding to move to the independent space. The due diligence allows time to mentally prepare for the change, consider whether the move is right for you and your clients, plus give you new perspective on various options. We encourage advisors to look a [...]

For advisors considering the RIA space, a few lessons learned on the client side are key to a successful transition.

Do your due diligence

At Dynasty, our most successful transitions were executed with advisors who had done exhaustive due diligence before deciding to move to the independent space. The due diligence allows time to mentally prepare for the change, consider whether the move is right for you and your clients, plus give you new perspective on various options. We encourage advisors to look at all the various options available, to learn the language of the RIA space and to talk to their peers or other advisors already in the space. In other words, doing your homework today may prevent regret tomorrow.

The battle is won in preparation

Any transition to independence requires a significant amount of work, which in itself can be chaotic. We developed a 150-item checklist and project plan that helps to provide order to the move, plus software to help manage the transition in a secure and confidential manner. The best transitions are led by advisors and teams who make sure all their work on the front end is done prior to their move.

Perform a detailed financial analysis

We spend a good amount of time helping to teach the language of independence from a P&L perspective. We work with advisors to run detailed P&L analysis on their new business. The best advisors know what their startup costs will be, fixed and variable costs going forward, and targeted gross and net margin levels before they launch. They then decide if they will self-finance, take a loan, sell a piece of equity or some other option. These advisors take a disciplined approach to managing their finances through the transition in order to be able to hit preset financial hurdles.

Tackle big items first

We tend to encourage teams to tackle the big items around the move first. In general, we find that picking a name, finding and negotiating real estate, determining equity splits, building operating documents, getting seed capital in place, building brand and marketing pieces, and getting ADV work done are some of the bigger items that can take time and slow down a transition. Get in front of these items first so they don’t slow you down later.

Map for success

It’s important to do detail capability mapping for your clients. Investing the time to map unique investment product needs, loan products and rates, manager access and pricing, research and trading needs, and any alternative investment needs will prevent any surprises for you and your clients later. The most successful transitioning advisors we work with were relentless on behalf of their clients, making sure they could do everything their client needed and, in some cases, more, on the move to independence.

Practice client communication

We have partnered with advisors on some of the fastest transitions in the RIA industry and have seen several transitions actually completed in as short a time as a month. In all of these expedited transitions, the advisors invested time in role-playing conversations with clients and media. Writing out talking points and rehearsing the conversations, creating an anticipated FAQ list and answers, and practicing it with your team will have you ready come transition time.

Be mentally ready for the administrative push

The best advisors and teams making the move to the independent space understand that it is going to be roughly six months of heavy lifting ahead of them. Often times we suggest adding some temp staff to help with paperwork during the transition. However, being mentally and physically ready for the administrative grind is important. We encourage teams to put proper rewards and incentives in place, to over-communicate with family around the transition time frame and to celebrate as family and involve them where it makes sense. We also look for ways to make it fun and keep energy up while encouraging employees to get proper rest as they prepare to make the move.

Don’t jump the gun

Almost without exception we hear from teams “I wish I had done this sooner.” While success breeds more success and it’s easier today than ever before to make the move to independence, it's important that advisors make the move at the right pace and time for them and their teams. Rushing things can have a negative impact on your new business; too much thoughtful preparation for your move to independence can never be a bad thing.

Shirl Penney is the founder and CEO of Dynasty Financial Partners.

December 24, 2015

INTERVIEW: Dynasty's Success Reflects The Breakaway Client - Not Just Advisor - Trend
Family Wealth Report

Family Wealth Report caught up with the chief executive at Dynasty Financial Partners about the firm's success and how this reflects the evolving wealth management landscape. Many positive developments led to an increase in US advisor headcount in 2014 – for the first time in nine years – by 1.1 per cent. There [...]

Family Wealth Report caught up with the chief executive at Dynasty Financial Partners about the firm's success and how this reflects the evolving wealth management landscape. 

Many positive developments led to an increase in US advisor headcount in 2014 – for the first time in nine years – by 1.1 per cent. There has been a heavier focus on teaming and onboarding rookie advisors into multi-advisor practices while there is also greater awareness about succession preparedness, according to Cerulli Associates.

Against this backdrop, more and more advisors are spinning off from larger institutions and “going independent,” which as one executive told Family Wealth Report previously used to be a point of anxiety but is now a point of confidence – particularly given the ongoing fiduciary debate.

New York City-headquartered Dynasty Financial Partners, which develops, sources and integrates wealth management capabilities for independent advisors, recently toasted its fifth birthday; 2015 was a stand-out year for the firm, having taken on close to $10 billion in assets. Dynasty's success is evidence that the wealth management landscape is getting more sophisticated and transparency-orientated, said Shirl Penney, chief executive at the firm.

"When we talk about the fiduciary movement, end-clients think in terms of wanting advice that is separate from where products are manufactured and sold,” Penney said.

"If you look at asset flows – billions and billions a year – from banks and wirehouses to the independent channel, half of that has been from advisors going independent,” he said. “The other half has been from the breakaway client movement, which has received less attention. Growth is being magnified by advisors making the move to independence and clients looking proactively for an independent-based advisor.”  

Describing Dynasty's banner year, Penney said the firm is onboarding teams from all corners of the industry: independent broker-dealers who feel they've outgrown their current platform and want to launch their own RIA as well as established RIAs who are tired of juggling different vendor balls and are spending too much time on middle- and back-office related items, as well as larger wirehouse breakaways.

"The size of the teams making the move has also increased because the road to independence is well worn now, and success breeds more success,” Penney said. “We're providing a safe passage and an easier transition for bigger, more sophisticated teams who cover larger end-clients. We're also seeing groups of advisors more often; we've even seen teams in different cities launching multi-city RIAs.”

Dynasty's business model

Dynasty doesn't own any equity in any of its underlying advisors and nor do they own equity in Dynasty, and the firm works with advisors in four ways. The first strand is with the transition and set-up of newcomers (the fee for this varies based on the complexity of the team and how long Dynasty is needed on-site with them during transition.)

The second area relates to “core services” - the running of the middle- and back-office, or essentially all that is required to run an RIA successfully. This includes all third-party services and costs as well as Dynasty’s proprietary advisor desktop technology and support of Dynasty’s 45-member home office team. Then there is financing – say if the RIA has broken away and needs money to launch the business, or if they're already independent but need money to buy another RIA.

The last area covers products and services to implement strategies for end-clients such as life insurance, capital markets, investment banking, TAMP, SMA, UMA, and – one of Dynasty's fastest-growing businesses – outsourced CIO. To contextualize the costs for these different areas combined, the average RIA working with Dynasty typically gets a 65-70 per cent gross income on their business after expenses by the time that all fixed and variable costs are accounted for in their RIA P&L, Penney said.

Today, Dynasty has 35 network partner firms, comprising more than 100 advisors representing over $600 million in combined average client assets per firm. As the firm has seen bigger teams joining its ranks it has made significant investments in areas such as capital markets, trading and alternative investments to accommodate the needs of wealthier clients.

Penney believes Dynasty is not simply taking advantage of a trend toward independence in wealth management, but is equally driving the movement forward by making it possible for advisors to more easily replace legacy systems at a time when many firms are grappling with how to make technology upgrades or even complete overhauls. The firm recently launched the Dynasty Desktop, for example, which provides integrated client engagement, investment management and business management tools for high-end advisors.

“It has been great to see advisors join our community come from legacy RIAs who seek better scale and operating efficiencies with their firm, IBD-based advisors who want to launch their own RIAs, or wirehouse advisors who are seeking independence for the first time,” said Dynasty’s head of service and transition, Jason Pinkham, in a recent statement.

A report by Cerulli in January of this year predicted that asset marketshare gains in the RIA and dually-registered channels are likely to come at the expense of wirehouses and independent broker-dealers in the next five years, reinforcing the trend that set in after the financial crisis and which has continued. The trend has been described as “historical and expected,” and due to a range of factors including the flexibility and autonomy inherent in the independent channel with regard to portfolio construction, operational flexibility, fee structure and technology. Penney is certainly optimistic about the future of Dynasty, and aims to have 50 network partner member firms by this time next year.

December 23, 2015

Coaching Helps Level the Playing Field for Wealth Managers
The Wall Street Journal

Even the smartest professionals can benefit from a fresh set of eyes looking at their business practices and strategies from time to time. In the wealth-management business, such guidance is now available from companies that provide investment products and account-custody services, as well as from newer firms that empower “breakaway” teams to leave their employers and build new [...]

Even the smartest professionals can benefit from a fresh set of eyes looking at their business practices and strategies from time to time.

In the wealth-management business, such guidance is now available from companies that provide investment products and account-custody services, as well as from newer firms that empower “breakaway” teams to leave their employers and build new registered investment advisers.

And the assistance typically has no explicit cost, because the companies will benefit in higher fees or assets under management if the advisers grow their businesses.

The executives at these companies are like management consultants who are laser-focused on the changing landscape of wealth management. Their expertise, along with various services available from their firms, are leveling the playing field between the large and small shops of wealth management.

John Anderson, the head of practice management solutions at SEI Investments Co., recalls a confident statement made by the founder of a thriving advisory firm serving people who had become suddenly rich in their early 20s. The firm had never lost a client as a result of not having a website, the adviser told Mr. Anderson, whose company provides investments and account-custody services.

After searching online for the RIA’s corporate name, Mr. Anderson realized the adviser was missing opportunities to grow his business. The No. 1 listing in an online search was a company offering payday loans. There were no hits for the RIA with its carefully considered wealth-management services—even though the firm targets millennials, who are always online and expect to find answers on the Web.

Blocking and tackling skills

On one level, this story illustrates how all financial advisers, whether they work for RIAs or wirehouses, can get lost in the day-to-day exigencies of finding and retaining clients. Been there, done that.

But marketing expertise is just one part of what practice-management consultants like Mr. Anderson and other industry experts offer their clients. Their services often address the broader management needs of RIAs, including operating issues like employee retention or how to increase profit margins.

“We can bring more of a global perspective into running a small business,” Mr. Anderson says.

David Canter runs the practice management and consulting group at the Fidelity Investments unit that works with independent financial advisers. Comparing his group within Fidelity Clearing & Custody Solutions to the management consultants at McKinsey & Co. or Bain & Co., he says there are 30 professionals at his Fidelity unit who “help advisers grow, improve and succeed.”

“It’s hard to focus on growing a business when you’re running one,” Mr. Canter observes.

I buy that—especially given the size of most RIAs.

Fidelity’s 2015 Benchmarking Study, released last week, reports that $214 million is the median assets under management at RIAs. These are small organizations, which can support only so many people—about nine employees on average for firms with under $500 million in assets, according to Fidelity.

The same study included 83 firms with over $1 billion in assets, and even they typically employ only about 24 people. All owners, at large RIAs or small, are no doubt pulled in hundreds of different directions by the minutia that goes into operating a business.

Mr. Canter describes widely diverse assignments. His team helps RIAs “update, enhance and refresh messaging” to move beyond throwaway statements like, “We provide holistic wealth-management services,” which are far too vague.

Succession planning and technology

His team also helps RIAs address issues like succession planning, an especially important consideration given industry demographics and the ensuing impact on clients. According to the Fidelity study, 37% of firm owners are going to exit the business over the next 10 years.

In addition to business expertise, practice-management consultants help implement proprietary technology from their firms. Fidelity, for example, is introducing an automated-investing platform for advisers during 2016. Mr. Canter’s team will roll it out among RIAs that want the capability and believe it important for finding and retaining wealth-management clients.

Dynasty Financial Partners is a different kind of firm, a noncustodian. It helps breakaway advisers start and build companies, guiding them on myriad choices, like which technology platforms best suit their needs and whether to outsource mission-critical functions like compliance.

Ed Friedman, the director of strategic relationships at Dynasty, explains that there has been “an outcropping of businesses that service RIAs.” That growth has created options for financial advisers that didn’t exist five years ago—and the ensuing need for advice from experts who regularly review and evaluate what’s available.

The Rise of adviser-entrepreneurs

I have three takeaways:

1. These industry experts are culling through winning strategies and coaching an emerging breed of “adviser entrepreneurs,” whom I define as the founders of existing RIAs or recent breakaway teams.

2. Adviser-entrepreneurs who leverage the expertise and institutional capabilities of their coaches have the ability to create and deliver highly customized client experiences—thereby forcing all financial advisers, whether at wirehouses or RIAs, to continuously examine and refine their own value propositions.

Good for clients. Good for the industry.

3. A level playing field means advisers can choose what kind of operating environment they want, big or little, and still deliver sophisticated services and advice to their clients. And career flexibility is a beautiful thing. As Mr. Canter from Fidelity says, “There has never been a better time to be an adviser.”

December 21, 2015

Dynasty introduces portfolio manager service
PAM

Wealth management platform Dynasty Financial Partners has added a new financial data service to its offering after increasing demand from the ‘significant’ number of advisors taking on the dual role of portfolio manager for their clients. Under the agreement with Chicago-based data platform YCharts, Dynasty said it can now offer a service through its Dynasty Desktop channel allowing RIAs to function as portfolio [...]

Wealth management platform Dynasty Financial Partners has added a new financial data service to its offering after increasing demand from the ‘significant’ number of advisors taking on the dual role of portfolio manager for their clients.

Under the agreement with Chicago-based data platform YCharts, Dynasty said it can now offer a service through its Dynasty Desktop channel allowing RIAs to function as portfolio managers.

The Dynasty Desktop provides client engagement, financial planning, investment management, research, and business management tools for advisors operating in the Dynasty network.

“Through our partnership, Dynasty and YCharts empower advisors who choose to manage their own client portfolios,” said Scott Welch, chief investment officer at Dynasty Financial Partners.  “YCharts’ analytical and graphical functionalities not only help advisors build and manage their portfolios but also clearly illustrate what they are doing for their investors. This helps those advisors to deliver differentiated investment solutions and an enhanced overall client experience.”

The addition of YCharts gives Dynasty’s financial advisors the power of an institutional level platform.  YCharts gives advisors the option to monitor the macro environment with their database of more than 400,000 economic indicators, add visualizations of data for over 20,000 US/Canadian listed companies, and 40,000 funds.  In addition, numerous advisors rely on YCharts for their easy-to-use screeners and Excel Add-in to speed up their workflows.

“We find that leading-edge technology remains one of the key driving forces behind the ultra-high net worth advisory movement and our job as the premier independent platform services provider is to continue to partner with those technology leaders in the space which we are happy to have done again with YCharts,” said Ed Swenson, chief operating officer, Dynasty Financial Partners.

December 21, 2015

Dynasty Financial Partners Expands its Innovative Dynasty Desktop by Partnering with YCharts
Business Wire

Dynasty Financial Partners and YCharts today announced that YCharts will now be an integrated offering through Dynasty’s proprietary advisor Desktop. [...]

NEW YORK--(BUSINESS WIRE)--Dynasty Financial Partners and YCharts today announced that YCharts will now be an integrated offering through Dynasty’s proprietary advisor Desktop.

The Dynasty Desktop is a fully integrated desktop customized for high end, independent, financial advisors that provides a full suite of client engagement, financial planning, investment management, research, and business management tools. YCharts is a financial data platform specifically designed with the Independent RIA in mind.

Dynasty Financial Partners continues to innovate in the Independent RIA Space and continues to refine and expand the Dynasty Desktop capabilities. The addition of YCharts gives financial advisors the power of an institutional level platform. YCharts enables advisors to monitor the macro environment with their database of 400,000+ economic indicators, add visualizations of data for 20,000+ US/Canadian listed companies, and 40,000+ funds. In addition, numerous advisors rely on YCharts for their easy-to-use screeners and Excel Add-in to speed up their workflows.

The Dynasty Desktop provides Dynasty's Network of independent financial advisors a next generation workstation providing a seamless single sign-on point of entry. This single sign-on capability enhances an advisor’s, along with their staff’s, efficiency throughout the day by providing easy transition through multiple, integrated platforms like reporting and performance reports, CRM, business analytics, financial planning tools, and practice management content.

“We find that leading-edge technology remains one of the key driving forces behind the ultra high net worth advisory movement and our job as the premier independent platform services provider is to continue to partner with those technology leaders in the space which we are happy to have done again with YCharts,” said Ed Swenson, Chief Operating Officer, Dynasty Financial Partners. “Dynasty’s size and scale allows us to continue to enhance our proprietary technologies and programs on behalf of our advisory network.”

“Advisors are looking for ways to differentiate their services and provide value to their clients. We have found that Dynasty works with pre-eminent advisors around the country, and the addition of YCharts to the Dynasty Desktop meets an important need for these types of RIAs,” said Dave Lubnik, VP Sales at YCharts. “Using YCharts, advisors have access to robust data and investment research functionality, through a modern, easy-to-use web-based product.”

Trend: RIAs as Portfolio Managers

Financial advisors are increasingly looking for ways to differentiate their services and provide value to their clients. As a result, a significant number of advisors are becoming portfolio managers for their clients.

With this new agreement, YCharts and Dynasty Financial Partners are now able to provide the platform to enable RIAs to function as Portfolio Managers. This is leading to better results, improved client relations and an edge for advisors to win more clients and keep existing clients.

"Through our partnership, Dynasty and YCharts empower advisors who choose to manage their own client portfolios," said Scott Welch, Chief Investment Officer at Dynasty Financial Partners. "YCharts' analytical and graphical functionalities not only help advisors build and manage their portfolios but also clearly illustrate what they are doing for their investors. This helps those advisors to deliver differentiated investment solutions and an enhanced overall client experience."

About YCharts

Headquartered in Chicago, YCharts was founded in part to offer investment professionals an alternative to the handful of long-standing incumbent players.

With time and technology on their side, YCharts has quickly gained a reputation as being the platform that provides the user with an intuitive, fast, and easy-to-use experience that doesn’t require an enormous up-front investment of time.

YCharts offers deep and wide data combined with exceptional visualizations and customization.

For more information visit www.ycharts.com or contact dave@ycharts.com.

About Dynasty Financial Partners

Dynasty Financial Partners is the premier integrated platform services provider for the wealth management industry’s top advisors. Dynasty develops, sources and integrates wealth management capabilities, solutions and technology into its open-architecture platform to help independent advisors protect and grow their clients’ wealth. Dynasty’s core principle is “objectivity without compromise,” and the firm is committed to crafting solutions that allow investment advisors to act as true fiduciaries to their clients. For more information, please visit www.dynastyfinancialpartners.com and follow us on Twitter @DynastyFP.
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October 03, 2014

Dynasty Financial Partners Deepens Bench Strength with the Addition of Two Executives: Kara Valentine Joins Firm as Director of Marketing; Janessa Biller Joins Firm as Vice President, Relationship Management

Ms. Valentine and Ms. Biller Bring [...]

Ms. Valentine and Ms. Biller Bring Decades of Experience to Fast-Growing Dynasty

NEW YORK—-Dynasty Financial Partners today announced the addition of two new executives: Kara Valentine as Director of Marketing and Janessa Biller as Vice President, Relationship Management.

Kara Valentine joins the firm with over 20 years experience in marketing specifically driving new business development through effectively developing and implementing marketing strategies and tactics. She will report to Shirl Penney, President and CEO of Dynasty.

She joins the firm from U.S. Trust, Bank of America Private Wealth Management where she was a Senior Vice President, Divisional Marketing Executive. As part of this move, David Westcott will now be a dedicated resource partner for Dynasty’s network of advisors.

Shirl Penney, President and CEO, Dynasty Financial Partners, said, “Kara brings two decades of proven wealth management marketing experience to Dynasty and has worked on some of the largest brand campaigns in the industry over that time. She will be an important addition as Dynasty continues to grow rapidly and expand its platform. Together with David Westcott and Sally Cates, our team now has nearly 75 years of marketing and public relations experience that our advisor clients will benefit from as being part of the Dynasty Network community”

Reporting to Ed Swenson, COO of Dynasty Financial Partners, Janessa Biller will provide operational support to the firm’s independent advisors. Ms. Biller joins the firm from Goldman Sachs where she was Vice President, Prime Brokerage Client Services, Securities Division since 2011.

According to Mr. Swenson, “As we continue to grow our business rapidly we will continue to increase our investments in key areas to support our growing advisor network. Janessa will be a major asset as we provide increasingly sophisticated technology and operations to the Dynasty network of advisors. Her deep experience in operational support will add significant capabilities to our service team.”

Ms. Valentine began her career at the advertising agency Young & Rubicam as a media planner. From 1994-2004, she worked at Morgan Stanley, most recently as Executive Director, Mass Affluent Client Segment Marketing. From 2004-2012, she worked in increasingly senior marketing positions at Merrill Lynch Wealth Management including oversight of the marketing strategy and tactical support for Financial Advisor Recruitment Marketing. She joined U.S. Trust in 2012 as Senior Vice President, Divisional Marketing Executive.

Ms. Valentine has a Bachelor of Science in Business Administration, Marketing from Villanova University.

Janessa Biller started her career at UBS Financial Services as a Representative, U.S. Wealth Management, Client Reporting, Operations Division. She joined Goldman Sachs in 2008 as an Analyst, Prime Brokerage, Margin Lending, Operations Division and, in 2011, she became a Vice President, Prime Brokerage, Client Services Division.

Ms. Biller has a B.A. Economics and Romance Languages from New York University. She has a MBA from NYU: Leonard N. Stern School of Business. Her professional certifications include: Series 7 and Series 63.

About Dynasty Financial Partners

Dynasty Financial Partners is the leading independent integrated platform service provider to the industry’s elite advisor teams. Dynasty develops, sources and integrates the finest wealth management capabilities, solutions and technology into its customized open-architecture platform to help independent advisors protect and grow their clients’ wealth. Dynasty’s core principle is “objectivity without compromise”, and the firm is committed to crafting solutions that allow investment advisors to act as true fiduciaries to their clients. For more information, please visit www.dynastyfinancialpartners.com and follow us on Twitter @DynastyFP.

August 18, 2014

The Relationship between UHNW Investors and RIAs – Video ACE

Peter Williams, CEO and founder of ACE, and Tom Petrone, director of capital markets at Dynasty Financial Partners, discuss why a high net worth investor would look to Registered Investor Advisors for help, how the process of accessing an RIA is different in the public versus private markets, and what challenges investors should be ready to face when it comes to direct pri [...]

June 27, 2014

Reuters 2014 Global Wealth Summit – Todd Thomson discusses Independent Advisors

After the Reuters 2014 Global Wealth Summit, Todd Thomson discusses Dynasty Financial Partners and its role in the independent Advisor space. [...]

April 16, 2014

Dynasty Financial Partners Welcomes Paul Metzger as Chief Technology Officer

Senior Technology Executive to Launch Dynasty Desktop New York, NY, April 16, 2014 – Dynasty Financial Partners today welcomes Paul Metzger as Chief Technology Officer (CTO) reporting to Dynasty Co-Founder & Chief Operating Officer Ed Swenson. Based in New York, Mr. Metzger’s responsibilities will include expanding and enhancing the [...]

Senior Technology Executive to Launch Dynasty Desktop

New York, NY, April 16, 2014 – Dynasty Financial Partners today welcomes Paul Metzger as Chief Technology Officer (CTO) reporting to Dynasty Co-Founder & Chief Operating Officer Ed Swenson.

Based in New York, Mr. Metzger’s responsibilities will include expanding and enhancing the Dynasty technology offering that will provide Dynasty and its network of advisors with further integrated, efficient, and effective technology.

Mr. Metzger has over 25 years of experience working in technology space related to financial services. Most recently he worked at Neuberger Berman from 2008 – 2013 in various senior technology roles. He has been a consultant to the financial services industry since May 2013.

Dynasty Desktop

Mr. Metzger will lead the initiative to launch Dynasty Desktop: an innovative technology offering for independent RIAs that will provide functionality and integration across the full spectrum of RIA practice areas including client and relationship management, planning, workflow, reporting, portfolio management, business analytics, research, and practice management. The cloud-based interface will allow RIAs to manage their clients and business anywhere, anytime, on any device.

“I am delighted to welcome Paul to Dynasty Financial Partners,” said Ed Swenson, COO of Dynasty Financial Partners. “With his depth and relevant experience in financial services, he will lead the initiative to significantly enhance Dynasty’s technology offerings to independent RIAs.”

Mr. Metzger said, “I am thrilled to be joining the Dynasty team. They have consistently proven that they provide the industry-leading integrated platform for advisors seeking independence or to RIAs looking for a growth partner. I look forward to working with Dynasty and its advisor network and to continue to build on an already powerful offering by using innovative and best of breed technology.”

Dynasty CEO Shirl Penney added, “Dynasty continues to be laser focused on enhancing our platform of services to our RIA business owner clients. The evolution of our technology platform and the investment we are making to bring Paul onboard will lead to development of more tools to empower advisor partners to be more efficient, make better business decisions, and ultimately provide better service to their end clients.”

Paul Metzger Bio

Mr. Metzger has a 25 year career in financial services. He worked in senior technology positions at Neuberger Berman from 2008 to 2013 including in the role of Chief Administrative Officer of Global Technology and Operations from 2011 – 2013. From 2003-2008, he worked as Chief Operating Officer of Investment Management and Investment Banking Technology at Lehman Brothers. From 1990 – 1999, he worked at Neuberger Berman in increasingly senior positions, most recently as Chief Administrative Officer of the IT Department.

About Dynasty Financial Partners

Dynasty Financial Partners develops, sources and integrates the finest wealth management capabilities for the industry’s leading independent investment advisor teams. Dynasty’s integrated platform services delivery offers a customized open-architecture platform of wealth management solutions and technology to help independent advisors protect and grow their clients’ wealth. Dynasty’s core principle is “objectivity without compromise,” and the firm is committed to crafting solutions that allow investment advisors to act as true fiduciaries to their clients. For more information, please visit www.dynastyfinancialpartners.com and follow Dynasty on LinkedIn and on Twitter.

January 22, 2014

Dynasty Financial Partners Expands its Industry-Leading Business Development Team by Adding Ron Sallet as Senior Vice President of Network Development

New York, NY, January 22, 2014 – Dynasty Financial Partners welcomes Ronald Sallet who joins the firm as Senior Vice President of Network Development rep [...]

Multi-Generational Strid Family Has Deep Ties To Community

NEW YORK, NY, February 20, 2014 – Dynasty Financial Partners today announced its partnership with Concentus Wealth Advisors, the most recent independent investment advisory firm to leverage Dynasty Financial Partners’ industry-leading platform of integrated wealth management services and technology. The team is joining the Dynasty Network from Wells Fargo Advisors and was formerly known as Strid Wealth Management Group.

The Concentus Wealth Advisors team consists of the following financial professionals all joining from Well Fargo Advisors:

Erik O. Strid, CFP®, ChFC, – Principal
Gerald “Zeke” Strid – Principal
Paul F. Strid – Principal
Nathan J. Hayward, CFP®, MBA – Director
Thomas J. Greco, MBA – Director

“Concentus Wealth Advisors was built around our desire to deliver independent, integrated and comprehensive wealth management advice and planning solutions to the families we serve. Our clients are notable for their expertise at creating and accumulating wealth. They’re dedicated to building businesses, raising families, shaping communities and creating lasting, meaningful legacies,” said Erik Strid, Principal of Concentus Wealth Advisors. “We built this family business with the mission to help these families manage the complexity and responsibility of their wealth. We are looking forward to significantly growing our business as an independent RIA.”

The company will access Dynasty’s groundbreaking investment platform, which integrates industry-leading proprietary research from Wilshire Associates and Callan Associates and Envestnet’s state-of-the-art portfolio tools and reporting technology. Charles Schwab will provide clearing and custody services.

“The Concentus Wealth Advisors team consists of extraordinary investment advisors who have built a remarkably successful family-based business with a deep connection to their community. With their newly launched firm, we expect they will have even greater success,” said Shirl Penney, President and CEO of Dynasty Financial Partners. “Dynasty is excited to partner with Erik and Paul Strid and their team, and we are proud to add them to our Network of truly independent advisors.”

Biographies

Erik O. Strid, CFP®, ChFC | Principal

With over 20 years of industry experience, Erik guides the overall investment planning and portfolio strategy of our group. After graduating from Amherst College in 1991, Erik spent a year working with Rittenhouse Capital Management, before joining Gerry in 1992. Erik currently holds his general securities registrations and insurance licenses, as well as CERTIFIED FINANCIAL PLANNER™ and Chartered Financial Consultant designations. He serves on the boards of the Philadelphia Chapter of the Salvation Army, Acting Without Boundaries (serving young people with disabilities) and Rosemont School of the Holy Child. In addition, he is on the financial advisory board of the Sisters of St. Francis in Media, PA. Erik resides in Bryn Mawr, PA with his wife and three children.

Gerald D. Strid | Principal

Gerry Strid graduated from Villanova University in 1966 and leads our team with over 40 years of experience in the Financial Services industry. Gerry spent the majority of his career as a “Circle of Excellence” Financial Advisor at Merrill Lynch, before leaving to form the Strid Wealth Management Group in 2003. He has devoted much of his time and energy to support Project H.O.M.E, a non-profit outreach program in Philadelphia. Gerald resides in Villanova, PA with his wife and has five children.

Paul F. Strid | Principal

Paul manages the day-to-day operations of the team. After graduating with a Finance degree from Georgetown in 1997, Paul spent three years working for Credit Suisse First Boston in New York on their institutional sales desk and then as Director of Global Equities Information Technology. Paul joined the Strid Wealth Management Group in 2003. Paul resides in Berwyn, PA with his wife and four children.

Nathan J. Hayward, CFP®, MBA | Director

Prior to joining the Strid Wealth Management Group in 2008, Nathan worked with the Kessler Baker Wealth Management Group. Nathan graduated from Arcadia University with a Bachelor of Arts degree in Economics & Business Administration and then received his International MBA from Arcadia University in 2009. In addition, Nathan has received his CERTIFIED FINANCIAL PLANNER™ designation. He currently serves on the executive committee for the Arcadia University MBA Alumni Association, is an active finance committee member of the Scleroderma Foundation (Delaware Chapter) and participates with the non-profit organization Yoga Unites as the active Treasurer. A native of Bermuda, Nathan currently resides in Berwyn, PA.

Thomas J. Greco, MBA | Director

Thomas joined Strid Wealth Management in the spring of 2010 with twelve years of experience in the financial services industry. His previous experience was with The Vanguard Group and Turner

Investment Partners. Thomas graduated Bloomsburg University in 2002 with a B.S. in Finance. He also earned his MBA from St. Joseph’s University with a concentration in Finance.

Thomas resides in Chester Springs, PA with his wife and two children.

About Concentus Wealth Advisors

As a family-based team of independent Registered Investment Advisors, Concentus Wealth Advisors is committed to helping high net worth families achieve their most important financial goals. Our advice goes well beyond the accumulation of assets to address virtually every aspect of their wealth. The detailed and disciplined process we follow with each client results in a personalized wealth management roadmap integrating investment strategy, family governance, estate planning, liability and life insurance solutions, philanthropic endeavors, real estate and more—for both today and tomorrow. Our completely objective and transparent service model allows us to act in a truly advisory and fiduciary capacity for our clients; each solution we present is drawn from the best of Wall Street and is presented entirely in the best interests of the families we serve. In today’s complex financial world, Concentus Wealth Advisors brings welcomed clarity, vision and results to our clients’ financial lives.

About Dynasty Financial Partners

Dynasty Financial Partners develops, sources and integrates the finest wealth management capabilities for the industry’s leading independent investment advisor teams. Dynasty offers a customized open-architecture platform of wealth management solutions and technology to help independent advisors protect and grow their clients’ wealth. Dynasty’s core principle is “objectivity without compromise,” and the firm is committed to crafting solutions that allow investment advisors to act as true fiduciaries to their clients. For more information, please visit www.dynastyfinancialpartners.com.
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December 19, 2013

Dynasty Financial Partners Expands: Moves to Larger NYC Headquarters, Adds Staff

Dynasty Financial Partners today announced the move to their new headquarters in New York City. As part of their expansion plans, the firm will now be located at the prestigious mid-town location of 1350 Avenue of Americas on the 32nd Floor overlooking Central Park South. “We designed our... [...]

December 03, 2013

Dynasty Financial Partners Welcomes Ed Friedman as Director of Strategic Relationships

New York, NY, December 3, 2013 – Dynasty Financial Partners today welcomes Ed Friedman as Director of Strategic Relationships reporting jointly to Shirl Penney, President and CEO, and Ed Swenson, Chief Operating Officer of Dynasty Financial Partners. Based in New York, Mr. Friedman’s responsibilities will incl [...]

Dynasty Financial Partners today welcomes Ed Friedman as Director of Strategic Relationships reporting jointly to Shirl Penney, President and CEO, and Ed Swenson, Chief Operating Officer of Dynasty Financial Partners.

Based in New York, Mr. Friedman’s responsibilities will include business development, management of key client relationships, and delivering practice management programs working with Dynasty’s Network Advisors. Mr. Friedman has been a consultant to the financial services industry after leaving HighTower Advisors in 2011. He worked at HighTower since 2008 as part of the founding management team and was, most recently, Director of Advisor Development for HighTower. Mr. Friedman also has a long career as a leader in wealth management having held branch management positions and senior wealth management roles at Morgan Stanley over the course of his career.

“I am delighted to welcome Ed to Dynasty Financial Partners. We continue to see an acceleration in our business with the number and the size of teams looking to join Dynasty’s Network and thus continue to look to add top intellectual capital to the team to support this growth,” said Shirl Penney, President and CEO of Dynasty Financial Partners. “Ed brings a unique perspective to Dynasty having experience in wirehouse world, independent space, and as a consultant to advisors around areas of practice management. He will be a great educator for advisors considering independence, and a great advisor advocate and coach for those in our growing network.”

Mr. Friedman said, “I am thrilled to be joining the Dynasty team. They have proven over and over that they provide the industry-leading platform for advisors seeking independence or to RIAs looking for a growth partner. I look forward to bringing my experience to Dynasty’s Network Advisors in helping them to achieve all their business goals.”

Ed Friedman Bio

Mr. Friedman began his career at Morgan Stanley in 1985 as a Financial Advisor and worked at the firm in increasingly senior positions reaching Executive Director, Complex Manager at Morgan Stanley Global Wealth management from 2004-2008. After that, he moved to HighTower Advisors as Director of Business Development, assisting in attracting the first 18 teams to HighTower Advisors. Mr. Friedman left HighTower in 2011 to become an industry consultant counseling advisors in areas of practice management, expense controls, vendor selection, organic and inorganic growth strategies, and succession planning.

About Dynasty Financial Partners

Dynasty Financial Partners develops, sources and integrates the finest wealth management capabilities for the industry’s leading independent investment advisor teams. Dynasty’s integrated platform services delivery offers a customized open-architecture platform of wealth management solutions and technology to help independent advisors protect and grow their clients’ wealth. Dynasty’s core principle is “objectivity without compromise,” and the firm is committed to crafting solutions that allow investment advisors to act as true fiduciaries to their clients. For more information, please visit www.dynastyfinancialpartners.com and follow Dynasty on LinkedIn and on Twitter @DynastyFP.

October 14, 2013

Dynasty’s Michael Brown on Barron’s TV

Mike Brown discusses the impact of a Government Shutdown on the markets and the impact it will have both long and short term. [...]

September 28, 2013

Dynasty Financial Partners Expands Investment Platform with Significant Capital Markets Hire: Tom Petrone Joins the Firm as Director of Capital Markets

Dynasty Financial Partners today announced the addition of Tom Petrone as the Director of Capital Markets. Mr. Petrone will be based in New York City and [...]

Dynasty Financial Partners today announced the addition of Tom Petrone as the Director of Capital Markets.

Mr. Petrone will be based in New York City and has been appointed to the Dynasty Financial Partners Investment Committee. He will report to Todd Thomson, Chairman of Dynasty, in Thomson’s role as Chief Investment Officer.

As Director of Capital Markets, Mr. Petrone will be leading a number of major initiatives for Dynasty to expand its capital markets platform. He will enhance Dynasty’s current platform by further developing the firm’s capabilities to access the institutional capital markets desks across Wall Street.

In addition to trading securities, structuring of derivatives, designing hedging and monetization strategies on restricted securities and originating structured notes, Mr. Petrone will build a community of syndicate providers and an investment banker referral network.

Since launching Dynasty’s institutionally-advised asset management programs in 2012, Dynasty has seen rapid growth in its Outsourced CIO, unified managed accounts (UMA), separately managed accounts (SMA), advisor as portfolio manager and strategy models.

Dynasty’s Turn Key Asset Management Program (TAMP) just passed $3 billion in assets. Assets in Dynasty’s strategy portfolios, UMAs and SMAs have just passed $1 billion and assets in Dynasty’s newly launched Alternative Direct Solutions are approaching $100 million.

Mr. Petrone said, “I couldn’t be more excited to join the professional team at Dynasty. I’ve been incredibly impressed by the rapid growth of their business and the success of the advisors that have joined their network. I look forward to delivering world-class capital markets capabilities to advisors and their clients in the Dynasty Network.

One of the leading capital markets experts on Wall Street, Mr. Petrone joins Dynasty Financial Partners after 30 years of experience. Most recently, he served as Head of Capital Markets for the Citigroup Private Bank, North America responsible for the securities and transactional business across all asset classes. This included all client market activity on the bank and brokerage platform. Starting as an options trader at Smith Barney in 1979, Mr. Petrone held numerous senior capital markets positions over a 30 year career, including Co-Head of US Equity Derivatives at Citigroup.

Mr. Thomson said, “We are delighted to welcome Tom to the Dynasty team. He brings a significant depth of experience in capital markets to our investment platform and our Network Advisors. As we continue to expand our sophisticated investment solutions for the elite advisory firms in the Dynasty Network, Tom will be invaluable in structuring complex transactions, educating Network Advisors and delivering the best of Wall Street to our independent advisors.”

Shirl Penney, President and Chief Executive Officer of Dynasty, said: “Dynasty has experienced tremendous growth in assets in our investment platform over the past year. Our advisors are handling more complex and larger capital market transactions. With the addition of Tom, we are elevating our capital markets capabilities to an entirely new higher level.

About Dynasty Financial Partners

Dynasty Financial Partners develops, sources and integrates the finest wealth management capabilities for the industry’s leading independent investment advisor teams. Dynasty offers a customized open-architecture platform of wealth management solutions and technology to help independent advisors protect and grow their clients’ wealth. Dynasty’s core principle is “objectivity without compromise,” and the firm is committed to crafting solutions that allow investment advisors to act as true fiduciaries to their clients. For more information, please visit www.dynastyfinancialpartners.com.

July 08, 2013

Swenson: Breakaways not going away- Investment News

The Dynasty COO says the independent model is here to stay, thanks in no small part to the technology gains made by firms outside the wirehouse world. [...]

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December 17, 2012

Dynasty Financial Partners’ Network of 15 Advisor Firms Tops $13 Billion in Assets under Advisement on Two-Year Anniversary

Release: December 17, 2012 Contact: Sally Cates, Dynasty Public Relations, 212.373.1000, sallycates@dynastyfinancialpartners.com December 17, 2012. Dynasty Financial Partners celebrates its two-year anniversary this m [...]

Contact: Sally Cates, Dynasty Public Relations, 212.373.1000, sallycates@dynastyfinancialpartners.com

December 17, 2012. Dynasty Financial Partners celebrates its two-year anniversary this month with an expanding network of advisory firms and more than $13 billion in assets under advisement. As a result of this significant growth and momentum in assets and advisors, Dynasty is now considered one of the fastest growing financial services companies in the industry.

Shirl Penney, President and CEO of Dynasty Financial Partners, said, “It has been a remarkable two years. We are pleased that those teams that have been part of our network for more than 12 months have, on average, 120% of the assets they had when they broke away from their previous firms. Two of our firms have more than doubled their assets during their partnerships with Dynasty. Our ability to allow our advisors to become institutional ‘clients of the Street’ in order to execute strategies on behalf of their clients has proven to be an important differentiator for our teams.”

Dynasty Financial Partners now has 15 firms in its network with plans to limit its size to no more than 150 elite firms. Those 15 firms have over 40 advisor partners who manage 21 offices across the U.S.

Since launching Dynasty’s institutionally-advised asset management programs earlier this year, Dynasty has seen rapid growth in its separately managed accounts (SMA), advisor as portfolio manager, strategist models, and performance reporting platforms. Total assets are now approaching $2 billion in assets under advisement in these programs. In addition, there are plans to launch alternative investment access programs early in 2013.

“It has been remarkable to witness the rapid acceptance of Dynasty’s unique SMA program,” said Bill Crager, President of Envestnet. “Dynasty’s investment division is one of the fastest growing businesses we have seen, and we are excited by the future prospects of our partnership with them.”

In the industry, RIAs are growing as a proportion of all advisors as they continue to shift toward the independent business model. At the end of 2010, RIAs represented 7% of all advisors and are projected to grow by 13% by the end of 2012 according to Cerulli Associates. By 2015, Cerulli estimates that there will be more assets in the independent channel versus the traditional wirehouse and private bank channels.

“We are gratified that our strategy to ‘power independence’ for elite advisory firms is resonating so strongly with teams looking to break away from large brokerages as well as already independent firms,” said Todd Thomson, Chairman of Dynasty. “It seems that many of the best firms in the industry value our ability to customize their platform, provide access to the industry’s leading products, deliver institutional quality research and manager access, provide lending, trust and insurance solutions, and create a community of like-minded independent firms to share ideas and expertise.”

According to Dynasty Financial Partners’ Chief Operating Officer, Ed Swenson, “What is so exciting for us is that we are helping to power the American dream of business ownership by enabling advisors to be truly independent and helping them to establish their own firm, brand, business strategy and client coverage model. With Dynasty, we make it easier by helping advisors get all the benefits of independence while working behind the scenes to make it easier for them to have their own businesses.”

One of the attractions of independence for advisors is building the equity value of their business. “Advisors can build up the value of their firm over time and to monetize their large client base and AUMs,” said Mr. Penney.

New Tagline

To celebrate the two-year milestone, Dynasty Financial Partners is launching a new tagline: ‘Powering Independence.’ This tagline articulates Dynasty’s mission to help leading advisors build, service and grow their own business by evaluating, sourcing and integrating the industry’s finest resources and capabilities.

In addition, Dynasty is unveiling its new website today which will include video, enhanced graphics and a special section for advisors considering independence at www.dynastyfinancialpartners.com

About Dynasty Financial Partners

Dynasty Financial Partners develops, sources and integrates the finest wealth management capabilities for the industry’s leading independent investment advisor teams. Dynasty offers a customized open-architecture platform of wealth management solutions and technology to help independent advisors protect and grow their clients’ wealth. Dynasty’s core principle is “objectivity without compromise,” and the firm is committed to crafting solutions that allow investment advisors to act as true fiduciaries to their clients. For more information, please visit www.dynastyfinancialpartners.com

September 12, 2012

Dynasty Financial Partners Names Jonathan R. Morris as Chief Legal & Governance Officer

Industry Veteran Brings Depth of Wealth Management Experience and Thought Leadership to Dynasty Dynasty Financial Partners today announced that Jonathan R. Morris has been named Chief Legal & Governance Officer and will be managing all of the legal and compliance issues at Dynasty. Mr. Morris will report directl [...]


Industry Veteran Brings Depth of Wealth Management Experience and Thought Leadership to Dynasty

Dynasty Financial Partners today announced that Jonathan R. Morris has been named Chief Legal & Governance Officer and will be managing all of the legal and compliance issues at Dynasty. Mr. Morris will report directly to Shirl Penney, President and CEO of Dynasty Financial Partners.

“Jonathan’s stellar experience and track record makes him uniquely qualified to support Dynasty and its continued expansion in the financial services arena. He will be a key contributor with respect to strategic growth and risk management matters relating to all aspects of the firm’s business. He will lead all legal and compliance initiatives for Dynasty while adding to the firm’s intellectual capital that is made available to our network advisory firms. We see Jonathan’s role as critical to the firm’s continued development and expansion,” said Mr. Penney.

Mr. Morris will be responsible for all legal and governance matters including acting as a liaison to Dynasty’s outside counsel, negotiating contracts and representing Dynasty on all legal matters arising from its business. He will also be responsible for developing and maintaining Dynasty’s compliance programs in accordance with applicable rules and regulations.

Dynasty Financial Partners’ Network of advisors has been expanding rapidly over the last year and now has over $13 billion in assets under advisement. In the past 16 months, Dynasty has announced 15 partner firms with 37 advisors in all that have joined its growing network of top independent advisors that utilize Dynasty’s industry leading integrated platform. In 2012, the firm has broadened its geographic footprint by adding independent advisor teams in locations such as Florida, Illinois, Oregon, Texas and Wisconsin.

Mr. Morris has over 30 years of legal experience. He joins Dynasty Financial Partners from Day Pitney where he was Co-head of the firm’s Broker Dealer, Investment Adviser Practice Group. Prior to Day Pitney, Mr. Morris was a Managing Director, General Counsel and Head of Governance for Barclays Wealth where he supported the expansion of Barclays into the private wealth management business in the Americas. Prior to Barclays, Mr. Morris was a Managing Director and the Senior Attorney for Lehman Brothers Investment Management Division. He began his career at Seward & Kissel in New York. He received a JD from Fordham University Law School and a BA from Washington & Lee University.
About Dynasty Financial Partners

Dynasty Financial Partners develops, sources and integrates the finest wealth management capabilities for the industry’s leading independent investment advisor teams. Dynasty offers a customized open-architecture platform of the finest wealth management solutions and technology to help independent advisors best protect and grow their clients’ wealth. Dynasty’s core principle is “objectivity without compromise,” and the firm is committed to crafting solutions that allow investment advisors to act as true fiduciaries to their clients. For more information, please visit www.dynastyfinancialpartners.com.
Contacts

Dynasty Financial Partners
Sally Cates, 212-373-1000
sallycates@dynastyfinancialpartners.com

July 24, 2012

Dynasty Financial Partners Welcomes John Sullivan as Senior Vice President, RIA & Transition Services

Dynasty Financial Partners today announced that it has hired John Sullivan as Senior Vice President, RIA & Transition Services. Mr. Sullivan will be based in Chicago and New York. As Senior Vice President, RIA Services, Mr. Sullivan’s responsibilities will include supporting [...]

NEW YORK–(BUSINESS WIRE)–Dynasty Financial Partners today announced that it has hired John Sullivan as Senior Vice President, RIA & Transition Services.

Mr. Sullivan will be based in Chicago and New York. As Senior Vice President, RIA Services, Mr. Sullivan’s responsibilities will include supporting the Dynasty divisions focused on the transition of new advisor teams and the ongoing practice development of existing Network firms.

The addition of Mr. Sullivan follows Dynasty’s hiring of Austin J. Philbin as Senior Consultant, RIA Services in May 2012 as the firm builds out its RIA services team.

“Having worked with John for over a decade in the past at Citi/Smith Barney, I am delighted to welcome John to Dynasty Financial Partners. He brings a depth of ultra high net worth client and product wealth management experience to our Network Advisors,” said Shirl Penney, President and CEO of Dynasty Financial Partners. “As we rapidly expand our business across the country, John will be invaluable to advisors looking to grow their firms and ensuring they are maximizing Dynasty as their growth partner.”

“Having worked with several wealth management platforms over the years, I became increasingly aware of the need to offer comprehensive wealth management solutions on an open, objective platform,” said Mr. Sullivan. “It is clear that the Dynasty platform represents the future of wealth management. I am excited to join Dynasty as it continues to grow its business while driving positive change in the industry.”

Mr. Sullivan spent over twenty years at Morgan Stanley Smith Barney/Citigroup serving in numerous high net worth wealth management roles. Most recently, he was Director of Wealth Planning Centers, a national role geared toward helping Financial Advisors provide their clients with comprehensive wealth management solutions.

Previously, Mr. Sullivan served as Divisional Director of Private Wealth Management in the Midwest catering to those clients and prospects with $50MM or more in investable assets. He also spent several years as a Credit and Lending Specialist helping Financial Advisors deliver tailored credit solutions to their high net worth clients and prospects.

Mr. Sullivan is a graduate of the University of Maryland, and holds Series 7, 24, 63 and 65 licenses with FINRA.
About Dynasty Financial Partners

Dynasty Financial Partners develops, sources and integrates the finest wealth management capabilities for the industry’s leading independent investment advisor teams. Dynasty offers a customized open-architecture platform of wealth management solutions and technology to help independent advisors protect and grow their clients’ wealth. Dynasty’s core principle is “objectivity without compromise,” and the firm is committed to crafting solutions that allow investment advisors to act as true fiduciaries to their clients. For more information, please visit www.dynastyfinancialpartners.com.
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July 13, 2011

Why Brokers Are Leaving Wire Houses

Gary Kaminsky, former Managing Director of Neuberger Berman, comments on the trend of financial advisors seeking to become independent. [...]

April 25, 2011

Better Off with a Small Investment House?

Former Citigroup CFO Todd Thomson reveals his thoughts on the equity, capital & bond markets ahead of the end of QE2. Plus, why he started Dynasty Financial and what separates his “small but mighty” strategy from the giants of asset management. [...]

April 25, 2011

Retail Brokerage Business Model Failing?

A look at why the big business brokerage model is dying, with Todd Thomson, Dynasty Financial Partners chairman. [...]

April 25, 2011

Bank on Financials?

Discussing why financials continue to lag the market, with Todd Thomson, Dynasty Financial Partners chairman. [...]

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December 06, 2010

Is Full-Service Brokerage Model Changing?

Watch the CNBC video clip. [...]

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May 14, 2019

Former UBS Advisors Partner With Dynasty To Launch RIA
FA Magazine

Steven Tenney, Joseph Powers, Helen Andreoli and Jack Piper have partnered with New York consultant Dynasty Financial Partners to launch Great Diamond Partners, a Portland, Maine, independent wealth management firm [...]

Steven Tenney, Joseph Powers, Helen Andreoli and Jack Piper have partnered with New York consultant Dynasty Financial Partners to launch Great Diamond Partners, a Portland, Maine, independent wealth management firm.

Tenney, Powers, Andreoli and Piper previously managed $530 million in client assets at UBS Financial Services.

Tenney worked at UBS since 1993, most recently as senior vice president and senior portfolio manager. His new title at Great Diamond is CEO and founding partner.

Powers, a former private wealth advisor with UBS since 2000, will lead the financial planning and insurance strategies focus at Great Diamond.

Andreoli, a financial advisor, has two decades of experience in the financial services industry and has worked for Morgan Stanley, Merrill Lynch and UBS. Her new title at Great Diamond is CFO and founding partner.

Piper, a financial advisor with UBS Wealth Management for four years, will have the new title of founding partner. Piper will develop and manage client portfolios with the Great Diamond investment team, and will also work with individuals and families.

The four advisors will work with clients of their new company in preparing and executing business transitions, ranging from intergenerational wealth transfers to the sale of a business, the company said.

Great Diamond will be using Dynasty’s integrated Core Services platform for independent advisors, as well as its turn-key asset management platform (TAMP). In addition, Great Diamond will have access to Dynasty’s technology, including its proprietary advisor desktop; in-house specialists; home office support; and its industry scale.

Tenney said in an email that he plans to initially expand Great Diamond’s footprint in the Portland area, by finding like-minded advisors seeking to join an independent advisory firm, then expanding more broadly into the rest of New England.

“We will consider opportunities as they as they arise in other parts of the country as well,” he said.

Charles Schwab of San Francisco will provide custody services for Great Diamond Partners client assets, while Black Diamond Performance Reporting LLC of Jacksonville, Fla., will provide consolidated asset and performance reporting.

May 08, 2019

Merrill Lynch FA Managing $450M Goes Indie
Financial Advisor IQ

A veteran Merrill Lynch financial advisor in Atlanta has opted for independence, partnering with Dynasty Financial Partners, Dynasty says. Craig Robson, who had been with Merrill Lynch since 1994, has formed Regent Peak Wealth Advisors, bringing along analysts Kevin Manning and Nathan Hoyt, as well as registered senior client associate Carmen Laster and registered client associate Emily Raymond, according to a press relea [...]

A veteran Merrill Lynch financial advisor in Atlanta has opted for independence, partnering with Dynasty Financial Partners, Dynasty says.

Craig Robson, who had been with Merrill Lynch since 1994, has formed Regent Peak Wealth Advisors, bringing along analysts Kevin Manning and Nathan Hoyt, as well as registered senior client associate Carmen Laster and registered client associate Emily Raymond, according to a press release from Dynasty.

The team oversaw $450 million at Merrill Lynch, Dynasty says. Their new RIA tailors to corporate executives, business owners, multi-generational families, entrepreneurs and trustees and board directors, according to the press release.

“We are excited to launch Regent Peak Wealth Advisors because we believe we are able to better serve our client relationships within an independent advisory offering. Leveraging Dynasty’s capabilities will allow us to market ourselves to new opportunities, such as expanding our offerings to corporate executives,” Robson says in the press release. “By offering a more comprehensive range of advisory services, we will expand growth opportunities within our firm.”

Regent Peak has partnered with Dynasty for its technology, including its turn key asset management platform, and capital support services, Dynasty says. Regent Peak intends to grow its business through strategic acquisitions, according to the press release.

In January, Dynasty closed its in-house wealth management division, which had $2.2 billion in assets under management and $1.6 billion under advisement as of the end of 2017.

The company said at the time that it wanted to focus on its business-to-business offerings. Bringing on Robson’s new independent RIA follows about a week after Dynasty signed up an independent wealth management practice in Texas formed by a team of Morgan Stanleyadvisors who managed $6 billion at the wirehouse.

Merrill Lynch, meanwhile, also lost a broker in New York City, according to AdvisorHub. Mark Cassidy, who oversaw $32 million at the wirehouse, has joined the U.S. wealth unit of British firm Laidlaw & Company, the industry news website writes. Laidlaw has approximately 100 advisors in London and the U.S., according to AdvisorHub.

In addition, Matthew Liebman, manager of Merrill Lynch’s Boca Raton, Fla., complex, is relinquishing that role to become an advisor, the website writes. The wirehouse has not yet named his replacement, a Merrill Lynch spokeswoman tells AdvisorHub.

Furthermore, Mark Eckerline, market executive for Merrill Lynch’s Twin Cities complex, has retired, the website writes. Shawn Allen is replacing Eckerline on an interim basis, the spokeswoman tells AdvisorHub.

April 30, 2019

Morgan Stanley Loses $6 Billion Team That's Turned Indie
Financial Advisor IQ

A team of seven top producers at Morgan Stanley have left the firm to launch their own independent wealth management practice in Texas, partnering with Dynasty Financial Partners, Dynasty says. [...]

A team of seven top producers at Morgan Stanley have left the firm to launch their own independent wealth management practice in Texas, partnering with Dynasty Financial Partners, Dynasty says.

Led by Jason Fertitta, the Houston-based Americana Partners also includes financial advisors Billy Busch, Robert Wellington, Sheldon Busch, Josh Caltrider, Johnathan Schnitzer and Ben Athens, according to a press release from Dynasty.

The team, which caters to entrepreneurs, multi-generational families and family offices, previously oversaw $6 billion at Morgan Stanley, Dynasty says. Americana Partners will also have offices in Austin and Dallas

Fertitta first became a registered representative in 2001, with Lehman Brothers, and subsequently joined Morgan Stanley in 2008, according to his BrokerCheck profile.

“We will now be able to expand our client offering in a number of ways, including providing our clients access to comprehensive family office services, unique investment opportunities and the ability to source our clients’ capital markets and credit needs across multiple firms,” he says in the press release.

Americana Partners is affiliating with Dynasty for wealth management services and technology and capital support, according to the press release.

“We see this continuing trend of independent firms standing apart as the most powerful force in the market, delivering far more customized, objective advice to clients than any other segment of the industry,” Shirl Penney, Dynasty’s president and CEO, says in the press release. “As the largest breakaway this year, we are extremely proud to partner with a high caliber advisor like Jason and his remarkable team, and we welcome them to our network of independent advisors."


American Partners has also chosen Schwab as its custodian and Addepar for consolidated asset and performance reporting, Dynasty says.

At the end of last week, Morgan Stanley also lost three advisors in Boca Raton, Fla. to Wells Fargo, according to AdvisorHub.

Eric Brief, who’d been in the industry for 26 years, produced $1.5 million in revenue over the past year, the industry news website writes.

And the father-and-son team of J. Richard and R. Kyle Stewart jointly generated $1.3 million over the past year, according to AdvisorHub.

April 29, 2019

$6 Billion Breakaway Americana Partners Joins Dynasty
WealthManagement.com

Americana Partners' advisors join Dynasty Financial from Morgan Stanley; it is the largest single team to join Dynasty and the largest breakaway of the year. [...]

A newly established Texas-based independent wealth management firm will join Dynasty Financial Partners in this year’s largest breakaway, the company announced Monday.

Americana Partners is the biggest single team to ever join Dynasty. It manages more than $6 billion in client assets and includes seven financial advisors with offices in Austin, Houston and Dallas. Jason Fertitta, the firm’s first president, worked as a managing director and private wealth advisor at Morgan Stanley for more than 10 years. Before that, he worked in the High Net Worth Division at Lehman Brothers, and he told WealthManagement.com that his team’s decision to leave Morgan Stanley followed a close examination of the industry.

“We’ve been watching the independent space, and everyone on our team has an entrepreneurial background,” he said. “We think it’s at an inflection point where the technology and administration is as good, if not better, than what we had at the big banks.”

The new partnership is one in a series of significant steps Dynasty has taken this year. In February, Dynasty announced that it would move its headquarters from New York City to St. Petersburg, Fla., though it would retain its New York office. Dynasty also announced that Angela Gingras, a 21-year veteran of Raymond James, would be the director of operations at the new Florida location.

Additionally, Dynasty announced earlier this month that Eric Castillo, the former chief technology officer and chief operating officer for Stelac Advisory Services, would take over as Dynasty’s CTO to facilitate the second phase of Dynasty Desktop. The cloud-based desktop platform initiative first launched in 2014, and Dynasty Desktop 2.0 will include an advisor-client portal to support communication between advisors and clients. Shirl Penney, the president and CEO, founded the firm in 2010.

As part of Americana's deal with Dynasty, its advisors will have access to institutional research from Callan Associates and the turnkey asset management platform Dynasty created in partnership with Envestnet. Americana selected Schwab to provide custody services for client assets and Addepar for consolidated asset and performance reporting.

Fertitta said client support had been overwhelming in the 48 hours since Americana Partners launched, and the next several months would largely be devoted to ensuring that the clients who followed them would enjoy a seamless transition. However, he also said the firm was interested in growth, including through M&As, and he believed that more teams in wirehouses may soon enter the independent space.

“We’re a large team inside of a big bank that made the decision to move, and I expect you’ll see more,” he said.

April 29, 2019

How Schwab Ate Wall Street
Wall Street Journal

Among them is Phil Fiore, who left UBS and opened his own advisory firm in 2017. He needed a place to put clients’ assets. Now, clients at his Shelton, Conn., firm together have about $700 million at Schwab, which offered technology and research making it easier to leave a traditional firm, he said. [...]

When Walt Bettinger’s 3 a.m. alarm sounds, among the first things the Charles SchwabCorp. SCHW -0.82% chief executive does is check how much net new money his company has pulled in over the past 24 hours. Last year, that was an average of $624 million a day—more than its three biggest Wall Street rivals combined.

Schwab was known mostly as a discount broker for amateurs when he took the helm in 2008 from founder Charles R. “Chuck” Schwab. Now it resembles something more like a personal-finance supermarket, offering services for the wealthy and budget-minded alike, at rock-bottom prices, spanning trading, banking and advice, both human and robotic.

Once barely noticed by the denizens of Wall Street, Schwab has amassed a stockpile of client assets that dwarfs those at Bank of America Corp.’s Merrill Lynch, Morgan Stanley ’sbrokerage arm and UBS Group AG’s Americas unit. Its stock is up 76% since the end of 2007, versus 26% for the Dow Jones U.S. Select Investment Services Index.

Brokerage BossCharles Schwab weathered the financial crisis under Walt Bettinger, who became CEO in 2008.Performance since the end of 2007Source:
%Charles Schwab sharesDow Jones U.S. SelectInvestment ServicesIndex2008’09’10’11’12’13’14’15’16’17’18’19-100-75-50-250255075100125150
Schwab’s blue-chip rivals are being dragged along in its wake. Forced to respond after years of ignoring the threat, they’re moving down market and cutting fees across the board, eating into what was once a vital source of income and transforming the business of personal financial services into something that looks more like a commodity business.

Morgan Stanley recently published an Instagram post to market the idea its services aren’t just for millionaires. JPMorgan Chase & Co. is giving away free trades. UBS in April launched an iPad app for its wealthy clients. Goldman Sachs Group Inc., adviser to billionaires, is targeting middle-class clients with its Marcus arm. Companies mentioned in this article were given an opportunity to comment on Schwab’s effect on their business.

“What we have to figure out is how does this business grow more rapidly than Schwab’s,” said a wealth-management executive at a major Wall Street firm that competes with Schwab.

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Mr. Bettinger’s formula for attracting new money—$228 billion in 2018—is rooted in Mr. Schwab’s blueprint: Keep prices low and the rest will follow. Self-described “Schwabbies” at the company are obsessed by it. Jonathan de St. Paer, head of investment management, said that in his 16 years at Schwab, someone has asked at every meeting: “Can we do it cheaper?” In March, it introduced subscription pricing for financial planning that makes advice less expensive.

Sweet SpotSchwab's low-price strategy has helped it outstrip rivals in drawing in client funds.Client balancesSource: company filings
.trillionSchwabMerrill LynchMorgan Stanley2010’11’12’13’14’15’16’17’18’191.251.501.752.002.252.502.753.003.253.50$3.75
Schwab’s task is to contend with the response from Wall Street incumbents as well as challenges from new low-cost entrants. Schwab has become big enough that, each time it launches a new product or slashes another fee, it sends ripples out among competitors who often are forced to respond in kind.

When in February Schwab doubled its lineup of commission-free funds, Fidelity Investments made a similar move with the hour. “You can see how other organizations have tried to become more like Schwab,” said Robert Siegel, a lecturer in management at Stanford University.

Mom and pop
Mr. Schwab, born to a thrifty family in Sacramento, Calif., founded an $84-a-year investment newsletter in 1963. When regulators in 1975 abolished fixed trading commissions, he got $100,000 from an uncle and launched one of the first discount brokerages.


Keep prices low and the rest will follow—the blueprint from founder Charles Schwab, here in 2018. PHOTO:RICHARD DREW/ASSOCIATED PRESS
Schwab went public in 1987 and attracted clients through the 1990s, as mom-and-pop investors chased stock-market gains. E*Trade Financial Corp. and TD Ameritrade Holding Corp. followed over the next decade, but much of Wall Street stuck to its higher fees.

After the tech bubble burst in 2000, Schwab’s trading volume suffered. CEO David Pottruck responded by raising prices. That hurt volume further, and he left after about a year. Mr. Schwab resumed control in 2004, slashing fees again. Mr. Pottruck didn’t respond to requests for comment.

Mr. Bettinger recounts how Mr. Schwab continually found new ways to defy conventional wisdom about fees. In 2005, the company was about to offer its first checking accounts. Mr. Bettinger, who had climbed the ranks to president after selling his Ohio record-keeping company to Schwab in 1995, was armed with an 80-page presentation laying out pricing scenarios for clients withdrawing from ATMs.

Mr. Schwab interrupted on slide three, asking what clients would prefer. The answer: free withdrawals from anyone’s ATM. “It was a pure eureka moment,” Mr. Bettinger said. “Who cares what the competition does? Long term, it’s the best decision.”

Three years later, when bailouts were sweeping Wall Street and Mr. Bettinger became CEO, he quickly cut a fifth of Schwab’s staff and slashed expenses. He worked to bolster its banking arm, launching a fee-free credit card in 2008 that paid clients 2% cash back—generous at the time. The idea was to encourage more clients to open bank accounts and transfer money from traditional banks.

 

Schwab offices in San Francisco in February. PHOTO: JASON HENRY FOR THE WALL STREET JOURNAL
Wall Street was paying little heed to Schwab’s moves. “People didn’t give Schwab a great deal of credibility for many years,” said Tim Oden, who joined Schwab in 1987 and is now senior managing director of its business catering to independent advisers. “A lot of firms looked down their noses.”

Schwab’s other businesses fed the bank: As its lowered and eliminated fees attracted new funds, it parked some of the funds in its bank and earned interest by investing or lending the funds out. So while it earned less off brokering and products by lowering costs on trading and fees, those cost reductions helped steer new money to the bank, where Schwab could earn growing returns on it.

Schwab’s bank made more than half the company’s overall revenue of $10.13 billion in 2018, up from 29% of revenue in 2009.

Net GainSchwab pulls in more new assets than big Wall Street rivals.New net assetsSource: the companiesNote: Schwab excludes significant one-time flows; Merrill Lynch doesn't include Bank of America's robo adviser; MorganStanley numbers are fee-based flows. 2019 data are through the first quarter.
.billionSchwabMerrill LynchMorgan Stanley2010’11’12’13’14’15’16’17’18’190255075100125150175200225$250
In 2009, Schwab executives felt the company was late to the market for exchange-traded funds, or ETFs, mutual funds that trade like stocks and generated profitable trading commissions for Wall Street brokerages. To make a splash in ETFs, the Schwab executives said, the company that year became one of the first in the U.S. to offer commission-free ETFs, coupled with lower expenses than rivals. “We thought we could differentiate ourselves,” Mr. de St. Paer said, so “we took a revenue cut.”

Within a year, Fidelity and Vanguard said they, too, would offer some commission-free ETFs. Much of Wall Street ignored Schwab, sticking to charging lucrative commissions on ETF trades.

 
 
Mr. Bettinger also sought to expand Schwab’s business in providing personal financial advice, aiming to undercut Wall Street firms. When Schwab waded into advice soon after opening its bank in 2003, it had taken prodding to convince Mr. Schwab, who hated the idea of cultivating a high-pressure sales culture, Schwab executives say.

Robo advice
As CEO, Mr. Bettinger pushed Schwab further into advice-giving. In 2011, he began opening independent branch franchises to help attract financial advisers, some from Wall Street firms, and gather more assets with the pitch: “Drive down costs for your clients.” Schwab formed partnerships to help build the business—unusual at a time when it typically went it alone. “There wasn’t a playbook, or a firm we could follow,” said Mr. Oden of adviser services. “We had to innovate.”

At the same time, Schwab was working to attract more independent financial advisers who would keep their client assets at the firm. Nearly half of Schwab’s total customer assets are now managed by roughly 7,500 independent advisory firms that use Schwab as custodian.

Among them is Phil Fiore, who left UBS and opened his own advisory firm in 2017. He needed a place to put clients’ assets. Now, clients at his Shelton, Conn., firm together have about $700 million at Schwab, which offered technology and research making it easier to leave a traditional firm, he said.

“It’s a magnet for some of the larger teams across the country,” he said, speaking of groups of brokers who tend to stick together when they leave Wall Street.


A Schwab branch in Chicago last year. PHOTO: CHRISTOPHER DILTS/BLOOMBERG NEWS
Wells Fargo & Co. is responding by trying to recruit independent advisers to a new platform. E*Trade in 2017 bought a custodial firm to get in on the business. Morgan Stanley and UBS that year made it harder for brokers to leave with their clients, slowing the pace of defectors Schwab attracted in 2018, Mr. Oden said.

In 2014, Schwab announced its “robo advice” service, a system that uses algorithms to provide portfolio-management services. Assets in Schwab’s digital-advice offerings now total $38 billion. With it, Schwab has driven down fees for advice, for some clients to nothing.

Schwab’s pitch lured Ryan Post, 34, an Indianapolis project engineer who last year moved his money from Northwestern Mutual. Schwab’s robo service built him an ETF portfolio to fit his goals. “I said, ‘look, the S&P made 22%, you earned me 8% and I had to pay you 1.2%,’ ” he said. “It was kind of silly to be paying all that money.”

Northwestern Mutual said its number of wealth-management clients is up from a year ago.

Schwab turns clients like Mr. Post into more-profitable customers in part by putting them in funds run by its $400 billion investment-management arm. Some have small annual fees that add up to billions a year. And Schwab says in regulatory disclosures it may require robo clients to keep up to 30% of the account in cash. Doing so, Schwab earns money from interest and lending the funds to others.


Terri Kallsen's office at Schwab in San Francisco. PHOTO: JASON HENRY FOR THE WALL STREET JOURNAL
Jon Stein, founder and CEO of robo-advising pioneer Betterment LLC, said these moves undermine Schwab’s sales proposition. “Free advice is a sham,” he said. When the relatively high cash allocation and sweep of funds into low-yielding bank accounts are taken into account, “they are charging way more than we are.”

Betterment charges 0.25% annually on assets. Betterment is also going after independent advisers and counts about 450 firms using its digital service.

“Cash plays an important role in a diversified portfolio,” said Schwab spokeswoman Alison Wertheim. The service was designed to help investors get advice, she said, and “many investors understand and are comfortable with this approach.”

Schwab’s in-house advice is causing some tension as it overlaps with the services offered by independent financial advisers affiliated with Schwab. The tension was a popular topic during a forum with Mr. Bettinger at an October conference, where the CEO called any threat from its robo platform “pretty low.”

Mr. Bettinger has also been driving Schwab further into wealth management for well-to-do clients who were once the turf of elite Wall Street firms. In 2015, he promoted Terri Kallsen, previously head of Schwab’s branch network, to head of retail. She has overseen a 63% increase in the number of new retail clients opening managed investment accounts. New accounts receiving advice now average about $600,000.


Ms. Kallsen, Schwab’s head of retail, in February. PHOTO: JASON HENRY FOR THE WALL STREET JOURNAL
There were clear signs Wall Street was finally waking up to the Schwab threat in 2016, when Morgan Stanley lured a Schwab executive to run its digital efforts. Morgan Stanley and other firms, including UBS and Wells Fargo, began launching robo-adviser services widely seen as a response to Schwab. JPMorgan Chief James Dimon in 2017 told analysts the firm’s new self-directed trading platform, offering free trades, was a response to Schwab, said a person who was there.

Last October, Morgan Stanley lowered the maximum rate brokers can charge clients for advice. Executives and brokers at other traditional brokerages say they are discounting more to keep customers. Wealthfront Inc., a robo-adviser firm whose founding CEO once said he modeled the company on the early days of Schwab, recently made automated financial planning free to clients who download the company’s app.

Robinhood Markets Inc., a Silicon Valley brokerage startup, has lured millions of new investors with commission-free trading. TD Ameritrade is expanding its independent adviser channel. Fidelity in August started offering index funds with no management fees after Vanguard let clients trade rivals’ funds free.

Mr. Bettinger, who said he frequently consults with Mr. Schwab, still chairman, said he is unfazed. “The rest of the industry ends up having to copy us anyway.”
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December 27, 2018

How to Plan Finances to Raise a Special Needs Child
NYtimes.com

Michael and Carole Maguire’s second daughter, Ally, was born with a rare chromosomal disorder, trisomy 12. “Doctors didn’t know much about it because it was so rare, but they said she would be profoundly mentally challenged,” Mr. Maguire said. “We didn’t think she would walk or talk.” [...]

December 13, 2018

Optimizing Year-End Charitable Strategies in New Tax Law
BrandywineOak.com

Approaching tax and charitable planning should be viewed through a different lens for Delaware and Pennsylvania residents as we approach yearend. Taxpayers should consult with a tax advisor before implementing any tax or charitable strategies, as the rules that govern these strategies can be complex. [...]

Optimizing Year-End Charitable Strategies in New Tax Law

By Michael J. Henley, CFP®, CPWA®, CRPC®
Founder & Chief Executive Officer (CEO) | Private Wealth Advisor
Brandywine Oak Private Wealth
Certified Financial Planner™ | Certified Private Wealth Advisor®
CFP® certfication awarded by the Certified Financial Planner Board of Standards, Inc.
| www.BrandywineOak.com

500 Old Forge Lane, Suite 501 | Kennett Square, PA 19348

Approaching tax and charitable planning should be viewed through a different lens for Delaware and Pennsylvania residents as we approach yearend.  Taxpayers should consult with a tax advisor before implementing any tax or charitable strategies, as the rules that govern these strategies can be complex. 

In late-2017 Congress passed the Tax Cuts & Jobs Act (TCJA), the most significant overhaul of the Federal income tax system since the Tax Reform Act of 1986.  One of the more significant aspects of the new tax law is the limited ability of taxpayers to itemize their tax deductions because of the increased standard deduction which is $12,000 for a single filer and $24,000 for a joint filer. 

Along with the higher standard deduction came a significant reduction in what items could in fact be itemized.  Delaware residents often have higher income taxes and less property tax deductions, while neighboring Pennsylvania residents generally have higher property taxes and less income deductions.  Nonetheless, Congress implemented a $10,000 cap or ceiling on the state and local tax deduction (referred to as the ‘SALT’ deduction) for both individual and joint filers. 

How does this impact charitable giving?  By using an example of a married couple who gives $5,000 per year to charity in the new tax law we can evaluate the impact as well as strategies to overcome the limitations of the new tax law.  This couple who earns $200,000 per year and lives in Delaware or Pennsylvania and will likely be capped at $10,000 on the state and local tax deduction.  They also have $7,000 in mortgage interest deduction (notably not home equity line interest which is no longer deductible).  Adding together the $10k SALT deduction, the $7k of mortgage interest, and the $5k of charitable donation brings this couple to a total of $22,000 in itemized deductions.  In this scenario the couple would take the standard deduction rather than itemize; effectively giving them $0 tax savings for the $5,000 they donated to charity!


How are we advising our clients donate to their favorite charities to ensure they still receive Federal income tax savings?  With a strategy called charitable “lumping” or charitable “bunching” using a vehicle called a donor-advised fund or charitable fund.  With a donor-advised or charitable fund, taxpayers are able to “lump” or “bunch” together a number of years worth of charitable gifts in one year in a lump-sum into their charitable fund. 

Continuing with the prior married couple example, what this couple could do is fund a charitable fund with 10 years worth of donations or $50,000.  By making a large lump-sum donation of $50,000, they would absolutely itemize their deductions in 2018 and receive a fairly substantial Federal income tax savings in the year they fund the charitable fund.  They could then subsequently distribute the $50,000 charitable fund to their favorite charities the way they had been previously at $5,000 per year.  This strategy creates a true win-win for both the taxpayer and the charities alike.    

The charitable fund can be funded with $50,000 of cash, but cash is often shockingly the most tax-inefficient asset to donate to charity.  Many of our clients are active employees or retirees of local corporate conglomerate DuPont Corporation, and often have shares of DuPont stock with a very low purchase price and significant negative capital gain consequences if they sell the shares.  In this scenario, making a $50,000 donation to the charitable fund of appreciated DuPont stock can provide the family a triple benefit.  First, the $50,000 tax deduction in 2018; second, the capital gain on the DuPont stock is evaporated tax-free; and third reducing company concentration risk.  Notably, since this couple would itemize their deductions in 2018—to the extent they give clothing or furniture donations to local charities, 2018 would be the opportune year to donate these items and actually receive a tax benefit for doing so. 

At the end of the day there are many great ways to donate to charities in 2018 while time lasts. 

December 04, 2018

Two autism diagnoses made this planner reprioritize
FinancialPlanning.com

When my two boys were toddlers, they were diagnosed with autism. Raising them — along with my daughter — has not only made me grow as parent, but has also made me a better financial advisor. Over the last 19 years I’ve learned some important lessons from parenting that have also benefited my business. [...]

When my two boys were toddlers, they were diagnosed with autism. Raising them — along with my daughter — has not only made me grow as parent, but has also made me a better financial advisor. Over the last 19 years I’ve learned some important lessons from parenting that have also benefited my business.

Find Your Why 
In our jobs as planners, we ask clients about their “Why.” My own why became crystal clear when my triplets were born. Planning was no longer just about accumulating wealth; it was about accumulating wealth for a very specific reason. I needed to make sure my children would be cared for, even when I was no longer there. When I help my clients focus on their top priorities, instead of market ups and downs, they know exactly what their planning stands for and sleep better at night.

Focus On What You Can Control
I could not control that I was suddenly responsible for not one — but three — babies. I could not control that my boys were diagnosed with autism. I could not control that there was no cure. But I could control how I reacted to these circumstances. Today, I talk to my clients about how no one can forecast or control what the market will do, but we can control how we react to it. Instead of focusing on unpredictable market changes, we home in on their specific goals.

Let Go and Live in the Moment
For some, putting their trust in others is not something that comes naturally. I had to learn to put my faith in others so that my boys could go away to school, and that my daughter could go away to college. I had to entrust their well-being to others and learn to let go.

Charles Massimo is the president and founder of CJM Wealth Management and the father of triplets.
It can be difficult for investors to put their trust in an advisor and let go, but I urge investors to partner with an advisor they trust and let the advisor’s expertise and knowledge carry them during the rough times. Let go of your concerns, and live your best life without too many worries. Trust me — 19 years went by in a flash — so make sure you take the time to enjoy the people around you and live in the moment.

As a business owner and a parent, I’m still learning. There’s no handbook for either of these parts of my life. But understanding my why, focusing on what I can control and putting my faith in others to lend a helping hand when I need it has made all the difference.

November 27, 2018

Ins and outs of seniors donating to their favorite charities under the New Tax Law
Delaware Business Now

The new 2018 tax law has left many Delaware and Pennsylvania residents uneasy about their previous charitable donation strategy as many taxpayers will no longer itemize their deductions. Taxpayers who are over age 65 receive an extra standard deduction of $1,300 per spouse, resulting in a married couple who is in their 70 [...]

Ins and outs of seniors donating to their favorite charities under the New Tax Law

ByDelaware Business Now -

November 26, 2018
 

By Alison C. D. Brooks, CFP, CRPC

Brooks is Co-Founder & Chief Operating Officer | Private Wealth Advisor at Brandywine Oak Private Wealth, Kennett Square

The new 2018 tax law has left many Delaware and Pennsylvania residents uneasy about their previous charitable donation strategy as many taxpayers will no longer itemize their deductions. Taxpayers who are over age 65 receive an extra standard deduction of $1,300 per spouse, resulting in a married couple who is in their 70’s with a whopping $26,600 standard deduction. This makes itemizing deductions even more unlikely and many clients are asking us why bother giving to charity anymore at all?

                                      UNICEF USA Official Site - Make a Tax-Deductible Donation

                                        Be a Beacon of Hope in a Child's Life. Make a Tax-Deductible Donation Today. donate.unicefusa.org/Donation

Many of our Delaware and Pennsylvania clients regularly donate to local charities such as the United Way of Delaware or Southern Chester County, the American Red Cross in Wilmington, or the Brandywine or Kennett Area YMCA and would like to continue donating to these organizations while still receiving a tax benefit.

A tax strategy that was made permanent under President Obama in 2016 was the Qualified Charitable Distribution (QCD) strategy. This strategy applies to those taxpayers who are over age 70½ and have required minimum distribution obligations (RMDs) from their retirement plans. The QCD strategy only applies to required minimum distributions from IRAs and does not apply to RMD obligations from employer-sponsored retirement plans such as 401(k) or 403(b) plans. The QCD technique involves a taxpayer donating up to a maximum of $100,000 from their IRA to their favorite charity or charities and avoiding all Federal income taxation on what is distributed to charity.Regardless of whether this taxpayer itemizes their deductions, the QCD provides a hard dollar Federal tax savings and a compelling above-the-line tax deduction.

Many of our clients are retirees of local corporate conglomerate DuPont Corporation, who after age 70½ have sizable required distributions from their pre-tax IRAs. The required distributions are often in excess of what the client needs for lifestyle and the taxable RMDs often result in a higher marginal tax bracket and an increased cost of Medicare Part B and D due to their increased income.

Medicare Part B and D premiums are based on a taxpayer’s modified adjusted gross income (i.e., their adjusted gross income plus any tax-free bond interest from municipal bonds) from two years prior. If a taxpayer was previously making $10,000 in charitable donations from cash and itemizing under the old tax law, it might be tax-advantageous for him or her to make the same $10,000 charitable donation from his or her IRA directly to charity.This would in effect reduce the taxpayer’s adjusted gross income and thereby reduce the amount of income subject to the calculation for Medicare Part B and D premiums.

In addition to Medicare Part B and D, a taxpayer’s adjusted gross income also determines how much of their Social Security benefit is taxable, as well as how much out-of-pocket medical expenses he or she can deduct as the itemized medical deduction is over and an above an adjusted gross income hurdle.

Retirees of DuPont and other large corporations often have a limited ability to reduce their adjusted gross income because their pension is fixed, Social Security increases marginally each year, and they have very little in the way of above-the-line tax deductions. Herein lies the value of the QCD strategy which is one of the most attractive strategies that exists in the tax code at reducing a taxpayer’s adjusted gross income.

Of course, before implementing tax and charitable strategies one should consult with a tax advisor first as the rules can be

November 19, 2018

Biz Smarts: Year-end giving and its economic and organizational benefits
Sacramento Business Journal

By Joseph F. Eschleman Nov 15, 2018, 9:53am The end of the year is creeping closer, taking us to the single biggest fundraising opportunity for all nonprofits. Understanding the spike in both donations and volunteer time that typically occurs between Thanksgiving and New Year's Eve, Sacramento charities are focusing on year-end fundraising campaign [...]

The end of the year is creeping closer, taking us to the single biggest fundraising opportunity for all nonprofits. Understanding the spike in both donations and volunteer time that typically occurs between Thanksgiving and New Year's Eve, Sacramento charities are focusing on year-end fundraising campaigns.

And for donors, in addition to general goodwill, giving in the 4th quarter of the year is also typically motivated by those looking to maximize end-of-year income tax deduction opportunities. In lieu of making outright cash gifts, many tax and financial advisors suggest clients engage in end-of-year gifting of appreciated stocks, bonds or mutual funds, as donors typically are able to avoid paying the capital gains tax associated with an outright sale of a security that has grown in value.

If you are looking to make a donation, nonprofits are expanding the timeline for their final fundraising campaigns, bolstered by the addition of the now annual #GivingTuesday on November 27. In fact, according to the Network For Good, in 2014, 31 percent of annual giving occurred just in December, and 12 percent occurred in the last three days of the year.

Things are no different for some of the more popular nonprofits in the greater Sacramento area, with specific end-of-year initiatives beginning to roll out now.

On the Sacramento Children’s Home (SCH) homepage, a targeted holiday giving campaign is already up and running, as potential donors are immediately greeted with the message “Help Make Holiday Dreams a Reality.” SCH has also created a YouTube video focused on this year-end giving theme, and in addition to directly soliciting cash donations, has also implemented two additional ideas for this end-of-year push. The Grab a Wish Star focuses on the direct emotional connection felt by a donor in donating a specific gift requested by an actual SCH child, helping to directly fulfill the holiday wishes of real children served by SCH. At holiday time, this directly benefits approximately 1,500 children, as donated gifts are typically the only gifts children at SCH receive.


Additionally, the Sacramento Children’s Home has an Adopt a Family program, aimed at families, coworkers, or groups looking to take care of more than just one SCH child this holiday season. Meant to focus on the growing need to provide further support to families served by their community programs, SCH’s Adopt a Family program supports those living in some of the highest risk areas of Sacramento and often lack the resources to provide for themselves or their children during the holiday season.

The Sacramento SPCA creatively leverages the end-of-year giving season by sponsoring a Jingle Bell “Pup Crawl” in early December that brings together donors, volunteers and, of course, dogs! Funds are raised through ticket sales for the event, as participants and their furry friends enjoy food and drink specials at a number of local Sacramento eateries and craft breweries. Understanding the popularity of craft beer in and around the city, as well as the continued momentum of Sacramento’s farm-to-fork movement, the Pup Crawl idea does an excellent job of tying together popular local themes to make end-of-year giving both easy and fun.

The holiday season is always an enjoyable but frenetic time of year. And for local charities, it is the time of maximum fundraising opportunity. All charities benefit from our general proclivity to give in both November and December, but additional economic and organizational benefits are gained by those who are creative and intelligent in how they cultivate this philanthropic spirit.

Joseph F. Eschleman is president of Sacramento-based Towerpoint Wealth.
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December 21, 2017

Bridging the Generation Gap: Engaging With Millennials
WSJ

David Storch is a financial adviser at Rose Capital Advisors in Miami Beach, Fla. Voices is an occasional feature of edited excerpts in which wealth managers address issues of interest to the advisory community. As told to Jacob Meade. [...]

As a 23-year-old millennial with a certified financial planner designation, I can say that many in my generation don’t feel they can connect with advisers who aren’t able to speak to what matters most to us: a detailed but easy-to-understand roadmap for financial success.

The millennial generation has been shaped by events like the Sept. 11 terror attacks on the U.S., the deepest recession since the Depression and the Bernie Madoff scandal. Many of us are wary of the establishment and lack trust in markets. So a focus of my work as a young adviser is helping reduce the disconnect between younger individuals and the wealth-advisory profession.

As I’ve gotten started in this profession, the managing partner of my firm has been a major role model. He showed faith in my abilities by letting me have direct contact with clients early on. We’ve developed a work relationship where we operate in tandem serving clients and their families. The perspective I bring allows us to better engage and communicate with young clients or clients’ children in layman’s terms.

For example, millennials aren’t looking for an adviser to talk about beta and Sharpe ratios. So when I speak to clients’ children, my goal is to educate them in a casual, comfortable setting about key investing strategies and how to budget for expenses from rent to Netflix. That connection helps deliver more overall value to clients’ families, but it also allows us to stay a step ahead on retention, since it makes clients’ children more prone to being comfortable working with us in the future.

Advisers who want to engage the younger generation better should know that millennials’ priorities often differ from those of their parents. The current version of the American dream isn’t just living in a nice area with a white picket fence. Many people now plan to rent longer, to have both partners work while they’re married, and to retire at a later age. So advisers need to address and accommodate the fact that younger people have much more varied notions of what the long-term course will be.

I also recommend advisers make sure they’re able to connect with younger people through digital client experiences. One program we find useful at my firm is TimeTrade. Although it’s not a financial tool, TimeTrade creates efficiency in our office by letting clients view our schedule and book meetings with us instantly, rather than the traditional mode of calling, chasing and waiting.

 

We have also developed a mobile application that allows clients to view their portfolio, chat with their adviser and read news tailored to their interests. We’ve found that the most valuable real estate in the world is in the palm of a person’s hand.

Speaking in millennials’ language, addressing financial matters within the context of their worldviews and leveraging technology that enables clients to instantly access you, your company and their financial world are the keys to successfully working with the younger generations.

November 07, 2017

FB ROUNDUP: PRE-NUPS, BILLIONAIRES, AND "SUDDEN WEALTH SYNDROME”
CampdenFB

Pre-nup popularity increasing to protect wealth [...]

Pre-nup popularity increasing to protect wealth

Pre-nuptial agreements are on the rise among ultra-wealthy individuals and families, especially among people aged under 30 getting married for the first time, a new study finds.

Two-thirds of the 25 English and Welsh law firms surveyed by Forsters’ family team said they had advised their ultra-wealthy and high net worth clients on a greater number of nuptial agreements since 2010.

Almost all (98%) of lawyers surveyed said they have been instructed on new nuptial agreement cases in the past 12 months. Of those, 44% have been instructed on six or more new nuptial agreement cases in the past 12 months and 13% had advised on 16 or more.

Forsters said the main driver for people entering nuptial agreements was wealth protection, including the protection of assets acquired pre-marriage and assets inherited from family. In the event of divorce, with over two-thirds (68%) cited this as the main rationale for those agreements they had advised on. Almost one-third (32%) cited other drivers including minimising the risk of adverse outcomes on divorce/providing more certainty (15%), pressure/encouragement from third parties i.e. parents/children/trustees (9%) and 8% citing other reasons, such as protection of business interests.

Jo Edwards (pictured above), head of family at Forsters, said while the perception may have been pre-nups were the preserve of older or wealthier generations, results showed the most common age bracket for those entering a nuptial agreement was 31-45.

“This reflects the average age of marriage (now 37 for men and 34.6 for women), as well as an increased awareness among that age group of the importance of nuptial agreements in the context of wider wealth planning and a desire to protect, as far as possible, current and future wealth on divorce,” Edwards said.

“The increase in nuptial agreements within this age group may also reflect ageing society and the fact that their parents may be leaving them inheritances/making lifetime gifts which there is a desire to protect on divorce.”

Billionaires return to growth globally, with Asia outpacing the US for the first time

Asian billionaires now outnumber their counterparts in the United States for the first time but the US still retains the greatest concentration of wealth while European growth is static.

The total wealth of Asian billionaires will overtake that of their peers in the US in just four years, if the trend continues, the new joint UBS/PwC Billionaires Report 2017 added.

The combined wealth of Asian billionaires grew by almost a third from $1.5 trillion to $2 trillion but still lagged behind the US, which maintained the largest concentration of billionaire wealth. In 2016, US billionaires saw their wealth increase from $2.4 trillion to $2.8 trillion, driven by technological innovation, financial services and materials, the study of 1,542 billionaires found.

There were 342 billionaires in Europe by the end of last year but growth remained stagnant in comparison. Overall wealth grew modestly by 5% to just over $1.3 trillion, with 24 new billionaires and 21 dropping off, a third of them due to death. This corresponded with previous findings that Europe had the highest number of multi-generational billionaires.

The total wealth of billionaires rose by 17% in 2016 to $6 trillion, double the rate of the MSCI World Index.

“Whereas last year we were concerned about issues such as regulatory upheaval and currency fluctuations, this year's return to growth and change in demographics shifts the focus to idealism, philanthropy and impact investing,” Dr Marcel Widrig, partner and private wealth leader at PwC, said.

“It’s not enough anymore to just preserve and grow wealth. Today's billionaires also feel a responsibility to drive social and economic impact—whether that means creating a private museum to promote the arts or buying a professional sports team to promote a passion.

“This will be even more important when an estimated $2.4 trillion of billionaire wealth is expected to be transferred in the next two decades. Technology, the creation of social networks and high-profile examples of philanthropic peers have all had an impact on this exclusive group.”

How to avoid “Sudden Wealth Syndrome”

A Florida multi family office has offered its advice to prevent wealthy families from contracting “Sudden Wealth Syndrome” and suffering “massive wealth destruction”.

Omnia Family Wealth said its advisers often saw the aftermath of heirs who were unprepared to manage wealth while guiding large multigenerational families. Family fortunes gradually deteriorated after wealth was unexpectedly transferred from one generation to the next.

Omnia announced its three approaches to help families prevent Sudden Wealth Syndrome:

1 Encourage families to engage in structured family meetings where the second and third generation heirs have a forum, with sufficient advanced time, to ask questions and learn about the patriarch’s guiding values and establish long-term goals

2 Provide educational opportunities for second and third generation heirs. A finance or investment educational course can help prepare heirs by giving them a basic understanding

3 Establish a purpose for the family’s wealth. Engaging heirs to continue a family legacy is a great way to give the wealth deep and long-lasting meaning

“Sudden Wealth Syndrome is preventable with family meetings, next generation education [and] family governance strategy,” Steven Wagner, Omnia co-founder and chief executive said.

“It all boils down to opening the doors of communication and talking to your heirs about the legacy you want to leave.”

November 02, 2017

Why Couples Should See a Financial Adviser Before They Get Married
The Wall Street Journal

People’s spending habits and other money issues are often overlooked in premarital planning [...]

For couples planning to get married, a meeting with a financial professional is an increasingly important step along the way, advisers say.

It’s a “function of the fact that people are accumulating assets before marriage, getting married later in life, and seeing more and more people getting divorced,” says Lawrence D. Mandelker, a trusts and estates attorney with Seyfarth Shaw LLP in New York who has been referring more clients to financial advisers for these services.

Financial professionals who offer premarital financial planning say they work with couples beyond the nitty-gritty details, such as who is going to pay the bills and whether the couple will pool their money or keep their accounts separate. They’re taking on a counseling role to help couples deal with the emotions that can complicate financial decisions—for instance, the stress that can strain a relationship when one partner tries to exercise too much monetary control.

“We’re more psychologists in this position than we are financial planners,” says Matthew Celenza, managing partner at Boulevard Family Wealth, an investment advisory firm in Beverly Hills, Calif., who has helped couples with premarital financial planning.

“It’s the root of so many problems in couples’ relationships,” says Jeremy S. Office, founder of Maclendon Wealth Management in Delray Beach, Fla., who regularly counsels clients on premarital financial issues.

Some professionals bill an hourly rate for these services, while others don’t charge separately for the premarital financial planning they do for existing clients or children of clients. Some don’t charge prospective clients, while others base their fees on the complexity of the situation. Couples generally meet with their advisers anywhere from one to five times, though it depends largely on what the issues are.

No secrets
For the process to work, couples should be willing to openly discuss their spending habits, assets, liabilities and financial goals, says Laurie Boore-Clor, a 37-year-old doctor in Ann Arbor, Mich., who went through premarital financial counseling with her fiancé, now husband, about two years ago.

“If you have secrets in a marriage, that doesn’t help your marriage,” she says. “If you’re willing to hide your money, what else are you hiding?”

Only when people are open about how they feel can inevitable differences be addressed. About a year ago, Renée Kwok, a certified financial planner and president of TFC Financial Management Inc. in Boston, worked with a young couple who planned to buy a house but had very different views on how much to spend.

The future bride was much more frugal than her fiancé, and it was an emotional sticking point, says Ms. Kwok. She talked the couple through different scenarios and ran financial projections. She asked the young man to consider how spending less would be more prudent and how it would help to ease his fiancée’s anxiety.

The couple ultimately decided to take a more-conservative approach based on the future bride’s concerns, Ms. Kwok says. These meetings are “a forum for creating compromise because you see [people’s] emotional reactions,” she says.

Encouraging communication
Tiffany Welka, vice president of VFG Associates, a registered investment adviser in Livonia, Mich., is part of the premarital counseling board at her church. Couples who want to get married at the church are required to meet with various social-services professionals, and they go to her for financial counseling. She doesn’t charge for these services.

Ms. Welka says she helps engaged couples create a budget, determine common financial goals and set a financial plan. She also encourages them to communicate about financial issues. On average, roughly three of the five young couples she counsels each week on premarital financial planning issues haven’t talked about their finances previously, Ms. Welka says.

They have no idea how much the other person spends or how much credit-card debt he or she is carrying—and they are surprised when the information comes out during discussions.

Derek Gauci, age 28, says the premarital financial-planning process got him and his now-wife, Lauren, also 28, started on the right financial footing. Before going through the process, the couple, who live in Plymouth, Mich., hadn’t given saving for retirement or life insurance a second thought, he says. Also, Mr. Gauci had been putting all his money into his wedding-photography business and didn’t know how much of a profit he was making, how to calculate monthly costs or how to budget appropriately. He feels premarital financial planning is so important that he has encouraged several employees to do it. “I think you’d be a fool not to,” he says. “You just don’t want to have any big financial surprises.”

Like a business deal
In some cases, premarital financial planning with older couples ends up being much like a “business negotiation”—trying to determine who is paying for what and how much, says Mela Garber, a tax principal at New York-based accounting firm Anchin, Block & Anchin and chairwoman of the firm’s trust and estates services group.

Ms. Garber has worked with several older couples where one person makes significantly more money than the other. During the dating phase, the wealthier person often covers the tab for dinners and vacations, but he or she may expect the partner to chip in more substantially after the marriage. If those expectations aren’t discussed up front, problems can arise. “Misunderstandings happen when people assume things that aren’t reality,” Ms. Garber says.

To be sure, not everyone needs a professional’s help with premarital financial planning. Several years ago, Saramaya Penacho, a publicist in San Diego, and her then-fiancé, management consultant Zach Penacho, instituted an annual financial-planning retreat where they go away for a weekend and discuss their past year’s finances and set a road map for the year ahead. At last year’s getaway, they discussed things like how much they could afford for a down payment on a home and brainstormed ways to trim expenses.

It has been an effective way for the couple to gain a shared understanding of their individual and mutual financial goals and save for their future, Ms. Penacho says.

October 26, 2017

Direct Lending Managers Face Rough Road Ahead
FundFire

Direct lending is still the hot ticket for private fund managers, dominating credit product launches and fundraising targets. But managers diving into the segment are likely to feel more pressure as competition heats up – making lending deals harder to find, loan terms looser, and expectations from experienced investors a greater hurdle, market observers say. [...]

Direct lending is still the hot ticket for private fund managers, dominating credit product launches and fundraising targets. But managers diving into the segment are likely to feel more pressure as competition heats up – making lending deals harder to find, loan terms looser, and expectations from experienced investors a greater hurdle, market observers say. 

Direct lending strategies dominated the private debt segment in the third quarter, according to Preqin data, with the most funds closed at 10 and most capital raised at $6.7 billion. Direct lending also remains the busiest private credit segment by far with 155 funds currently seeking $67 billion, including five of the 10 products with the largest fundraising targets, according to Preqin.

Interest remains strong among managers to launch new direct lending funds, says Jessica O’Mary, partner and attorney at Ropes & Gray. “The funds with successful track records are getting bigger, and there’s definitely more capital being raised,” she says. 

The wave of product development continues, with a string of first-time direct lending funds this year – including $500 million or larger entries from Capital Dynamics, Stone Mountain Capital, Adams Street Partners, and TIAA’s Churchill Asset Management. Siguler Guf, a $12.6 billion private equity manager, just this month closed its first small business direct lending strategy, with $300 million in a fund and related separate accounts. 

More are on the way: The $257.5 billion Brookfield Asset Management is aiming to build out its first direct lending business, CEO Bruce Flatt said at a recent investor presentation. And the $116 billion First Eagle Investment Management last week announced it is acquiring NewStar Financial, a middle market commercial lending company with $7.3 billion in credit fund assets, to become its new private credit asset management arm.

Those new entrants are hurtling into a market with a core of established players that are growing, O’Mary says. “We’re seeing multi-billion-dollar [successor] funds from managers that have good track records,” she says. “Almost everyone is raising a larger subsequent fund.”

All that activity adds up to a more difficult path for managers than a few years ago, especially to find deals, O’Mary says. “It’s a challenging environment – a number of managers are worried they won’t be able to deploy capital quickly,” she says.

Managers raising bigger successor products in particular will face a challenge if they are still aiming for middle-market loans, because they’ll have to find more deals to fully invest their funds, says Tom Draper, partner and attorney at Ropes & Gray. 

“With the same middle-market orientation, it will take a lot longer and more personnel to deploy those commitments, when each investment is relatively small,” he says. 

Direct lending managers are already seeing rivals step up activity in the search for deals, O’Mary says. “Even if you have target borrowers, they’re [getting more loan offers] than before,” she says. 

Developing networks of potential borrowers is not an overnight exercise, with managers needing years to form relationships with private equity firms that need financing for deals or with other corporate borrowers, says Tom Palecek, a founding partner at Summit Trail Advisors, a $5.1 billion independent advisor.
 
“We like the managers that have good networks and are able to stick to their knitting,” says Palecek, whose firm vets private credit managers with its own manager due diligence team as well as the Dynasty Financial Partners platform. “For a lot of [borrowers], you’ve got to get them a much better deal to change the manager they’ve been working with for the last five to 10 years. It’s something to be wary of about first-time funds.”

But Summit Trail also sees larger successor funds as a potential red flag, Palecek says. His firm put client capital in three direct lending funds that closed at $400 million, $700 million, and $800 million several years ago, but only has re-signed with one that kept its successor vehicle in the same size range – passing on two others that went for multi-billion dollar funds. 

“Both had great returns, but their opportunity set is the same and the teams had not gotten bigger,” he says. “That exposes a business model problem. That kind of manager may have to get through deals faster – maybe skimping on internal due diligence – or go after bigger [borrowers] or maybe have terms and covenants get looser.”

Indeed, loan covenants for borrowers have become a point of distinction in the market, with some established direct lending firms sticking to stricter terms, but other newer entrants – or managers seeking to grow faster – offering lighter provisions, says Randy Schwimmer, senior managing director at Churchill.

“Covenant-lite” loans emerged early last decade when banks began to package senior loans with high yield bonds and used the lighter leverage tests applying to bonds as part of the lending terms, typically for bigger-dollar borrowers, Schwimmer says. Those practices began to spread to smaller borrowers just before the 2008 crash, but then went away as banks shrank back from commercial loans in the post-crisis era – at around the same time direct lending managers stepped up in the market and sparked the senior loan fund wave still rolling today, he says.

But some banks have tried to make a comeback in commercial lending, and one of their tactics has been to reintroduce lighter covenant terms – a phenomenon that has led to greater competition in loan offers, with even some fund managers taking up these practices, Schwimmer says. Such looser terms are also going to smaller borrowers, he adds. 

“There are some [fund managers] hanging in there with [stricter] terms,” he says. “We’re worried about the effect of this down the road.”

The impact of such practices are likely to surface in a downturn, Palecek says. “Those will have a light shined upon them,” he says. “As an investor, you have to be willing to walk away from managers that change their models.”

September 13, 2017

Back to school means it's time to save

While it is arguably the best time to be on the east end of Long Island with the sun still shining brightly and the local farms bursting with their harvest, our attention begins to refocus away from the joys of a glorious summer. The traffic has given way to yellow school buses as our children return to their classrooms. This is the perfect reminder to parents about the need to plan for the costs of higher education. [...]

While it is arguably the best time to be on the east end of Long Island with the sun still shining brightly and the local farms bursting with their harvest, our attention begins to refocus away from the joys of a glorious summer. The traffic has given way to yellow school buses as our children return to their classrooms. This is the perfect reminder to parents about the need to plan for the costs of higher education. 

According to a recent study conducted by the US Department of Education, the average cost (tuition/ room & board) of one year at a public university is north of $30,000 and a private institution is approximately $45,000. Consider also that these costs have grown over the last decade at an average annual rate of 5%, far outpacing both inflation and wage growth. This means that for my twin boys entering Second Grade this year, when they reach college age it is likely that the cost of one year at public school will be over $57,000. One year of tuition at a private university may reach close to $75,000. These are daunting figures. 


The costs associated with obtaining a college degree might seem discouraging, but they are important to know and understand. Regardless of one’s financial condition, the best results are often achieved when a plan is initiated at the earliest possible stage. With that said, it is never too late to start planning. 


For parents of young children, 529 plans have become popular tools to save for education. These state sponsored plans offer tax advantages and are even transferrable among family members. Education Saving Accounts also offer certain tax benefits, but differ from 529 plans in their contribution limits. Student loans too, are an important tool, but come with a cost. The burden of carrying debt for a young adult entering the work force handicaps their path toward financial independence, a goal every parent has for their children. Merit and performance based scholarships and financial aid packages may also play a role in covering some of the costs of college, but cannot be guaranteed and should not be fully relied upon. Other strategies to set aside money for education exist and vary in their complexity and have benefits and limitations all their own. 

Because every family and every child is unique, with their own set of values, expectations and objectives; it is crucial to take an honest and thoughtful approach to saving for higher education. Starting early may ease the burden as parents can take advantage of opportunities and programs specifically designed for this purpose. Parents and others who are thinking about funding education expenses should try to be as informed as possible and carefully consider both their options and their own financial situation and future objectives when deciding on appropriate levels to set aside for education costs. 


Watching my kids paddle out to the lineup at Ditch Plains with the warmth of summer still lingering in the air, it is fun to dream about one of them getting a full ride to college on a surfing scholarship, if there even is such a thing. I think instead I will add a little money to their 529 plans and make sure they do their homework.

 
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December 20, 2016

Renaissance Advisor Sees Commonality in His Diversity
Financial Advisor IQ

For a financial advisor at a small firm, David Steele gets a lot of press. [...]

For a financial advisor at a small firm, David Steele gets a lot of press. 

In the year or so since he launched San Francisco-based RIA One Wealth Advisors with his brother Jonathan Steele, he’s been written up in the Wall Street Journal, the San Francisco Chronicle and other publications — in addition to being featured in a video interview in FA-IQ.

But then Steele isn’t just a financial advisor. Besides running and co-owning One Wealth, which manages $300 million, the ex-JPMorgan Securities broker owns half a dozen eating establishments in the Bay Area, works as a restaurant consultant, promotes concerts and festivals, and owns a chain of yoga studios.

As though that weren’t enough, he’s also a visual artist with several gallery shows under his belt and a creative writer whose first play premieres next summer at San Francisco’s prestigious PlayGround studio.

From Steele’s perspective, however, all these pursuits are rooted in two things: hard work and precise planning.

“It’s all the same,” says Steele. “People tend to dwell on the differentiators.”

Instead of seeing the processes involved in establishing a successful eatery as radically different from those related to helping a client devise a thoughtful, resilient and detailed financial plan, Steele contends they’re identical — at least in outline.

Similarly, just as producing a music festival involves coordination with artists and their management as well as facility staff, unions and a slew of vendors, being at the center of a client’s financial life means close and careful coordination with accountants, attorneys and other trusted professionals.

“Everything I do is the same,” Steele emphasizes. “I mean that as a positive: I find these processes very interesting and enjoyable.”

Even Steele’s artistic endeavors call for something in common with his other businesses.

“It’s just work,” he says. “Writing the play was work — sitting and typing — not, for me at least, a spiritual undertaking.”

In addition to seeing a clear throughline in a diverse portfolio of interests and business activities, Steele keeps things straight in his mind by putting One Wealth Advisors firmly at the center of his work life.

“I spend the most time on my financial business,” Steele says. In this sense, he adds, his work as a financial advisor is the hub of his professional interests, and the rest — from restaurants and music festivals to yoga studios and his own art — “are the spokes.”

With functional similarities clear in his mind, and a sense of centeredness around financial planning keeping things stable, Steele can reap the benefits of having other activities feed into his wealth management practice.

Among One Wealth Advisors’ clients are music-group managers, musicians, restaurant owners, writers and others connected to Steele’s non-financial business interests.

Without really trying — One Wealth Advisors isn’t in full-bore business-development mode — Steele says his client roster has gone “from zero to 20% or 25%” creative types in the last five or six years.

It helps that so many of his clients — especially the artists among them — are themselves multitaskers who don’t mind tackling new challenges.

“It all works together,” says Steele. “I’m not making a direct analogy with my own work here, but the artists I know who work in different disciplines do it with a sense of universal principles.”

Adds Steele: "Like my work with clients, their work is based on setting and achieving goals and on discipline and focus.”

December 20, 2016

The Ultimate Holiday Gift Guide For Clients
Financial Planning

Jonathan Blau of Fusion Family Wealth showcases his 2016 client holiday gift. [...]

The holiday season provides advisers with a great opportunity to show clients how much their business is appreciated. Gifts can say something special: From books and documentaries to picnic blankets and pecans, we've assembled some great ideas from advisers.

Click through to read how advisers selected, sent and packaged these holiday goodies for their clients.

December 13, 2016

From the expert: Spotting trends in Portland holiday charitable giving
Portland Biz Journal

From tapping IRA accounts to donating to under-funded schools, local wealth advisor Brett Davis takes note of some of the current trends in holiday giving. [...]

From the expert: Spotting trends in Portland holiday charitable giving

From tapping IRA accounts to donating to under-funded schools, local wealth advisor Brett Davis takes note of some of the current trends in holiday giving.

Read the full story: http://www.bizjournals.com/portland/feature/donating-to-schools-kids-and-other-trends-in.html

December 13, 2016

In season of giving, consider donor-advised funds
Central Penn Business Journal

At SevenBridge Financial Group, an independent financial advisory firm based in Harrisburg, we work with a number of high-net-worth clients in the community – both corporate clients and entrepreneurs. We also work with a number of privately held businesses. And because many business owners are asked to give, we assist with an overall gifting plan. [...]

At SevenBridge Financial Group, an independent financial advisory firm based in Harrisburg, we work with a number of high-net-worth clients in the community – both corporate clients and entrepreneurs. We also work with a number of privately held businesses. And because many business owners are asked to give, we assist with an overall gifting plan.

This is the time of year for year-end planning and the discussions often focus on charitable giving. At SevenBridge, we are proponents of donor-advised funds. Donor-advised funds are the fastest-growing charitable giving vehicle in the U.S. because they are one of the easiest and most tax-advantageous ways to give to charity, and they are of no cost to set up. Yet, when we recommend donor-advised funds to our Pennsylvania clients, most have never heard of them.

People in our community have traditionally given to their churches or other local charities. However, we have found that when we set up a donor-advised fund for them, their giving is taken to a different level. Charitable giving becomes more of a plan and is incorporated into taxes, estate planning, investment strategies and appreciated securities. As a result, we work with clients on long-term giving strategies and, consequently, their donations tend to be larger.

We have found that, when our business-owner clients are in the preparation phase of selling their closely-held business, we raise the topic of charitable donations and we discuss the option of donating shares of their private business into a donor-advised fund. We are currently working with several clients in this situation and they end up saving on taxes and reducing capital gains while supporting their favorite charities.

We recommend that people in our area take a more strategic look at their charitable giving. At SevenBridge, we recommend that our clients have a short- and longer-term goal of giving. We encourage clients to continue to donate to their local community nonprofits. But it’s also a good idea to take time to consider the possibility of endowing a scholarship or making a significant donation to a college or national nonprofit. We work with clients to develop a donation timeline often based on pay-outs or liquidity from the sale of a business.

In addition, we urge clients to consider the best donation vehicles. In the past, family foundations were very popular – but today, it’s hard to justify the cost and complexity of family foundations when there are simpler and cheaper options.

Charles Eberly is managing partner of SevenBridge Financial Group, a wealth management firm in Harrisburg.

December 12, 2016

Here are some tips when it comes to charitable giving: Special Holiday Column
PennLive

As Pennsylvania investors take stock in their overall financial picture at the end of the year, it is a great time to assess which charities they'd like to contribute to. You will need to determine the best ways to pay for these contributions while considering their tax and income benefits. [...]

As Pennsylvania investors take stock in their overall financial picture at the end of the year, it is a great time to assess which charities they'd like to contribute to. You will need to determine the best ways to pay for these contributions while considering their tax and income benefits.

Gifting can be a great way to offset a year with expected or unexpected high earnings or to address the tax implications of added income such as year-end bonuses. Generally, if you itemize your deductions, making charitable contributions can decrease your tax bill, and with higher tax rates for high-income earners, there is an even greater tax benefit.

It is important to consider that charitable giving also involves identifying the charity or charities that are a good fit for your gifting desires. It goes beyond establishing the amount that you would like or can afford to give. It's also about establishing the worthiness of the charity for your gift.

I recommend doing some research - either on your own or through reputable third-party resources to determine factors such as how top heavy an organization is. In other words, how much of your donation will go toward salaries, overhead, etc. as opposed to actual use by the charity.

I've used sites such as Charity Navigator, Guide Star and the BBB Wise Giving Alliance, which are all closely monitored and managed. They can help you learn more specifics on the charities as well as rankings that could be useful in choosing a charity that fits your requirements.

Once you've established the charities that fit your desired preferences, you have several options on how that gift can be structured. For example, you can create a donor-advised fund, in which the donor can make recommendations to an organization and their board members about how the money is to be used. You can make deductible donations of cash contributions or appreciated stock. Assets in the fund are not subject to federal estate taxes or state inheritance taxes. 

A donor-advised fund allows you to make contributions to the charity while becoming eligible to take an immediate tax deduction. In addition you can then make recommendations on your desired timetable for distributing the funds to qualified charitable organizations.

There are a number of public charities to choose from that sponsor DAFs. In Pennsylvania, these could include Vanguard in Valley Forge (national reach), The Pittsburgh Foundation (regional reach) and in my own community, The Mt. Lebanon Community Foundation. Once you make your choice, you can then recommend grants from your DAF to other eligible charities, which could include IRS-qualified 501(c)(3) public charities.

Establishing a DAF can be a particularly useful strategy at year-end because it allows you to make a gift and take the tax deduction immediately but doesn't require you to decide on the charities to support with grant recommendations.

Before undertaking any giving strategies, you should consult your legal, tax, or financial adviser. But, properly employed, each of the strategies represents a tax-advantaged way for you to give more to your favorite charities. And giving is what this time of year is all about.
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December 14, 2015

Helping Clients Make the Most of Career Transitions
Financial Advisor IQ

So it’s likely financial advisors will find themselves with clients who are considering major career transitions. Such moves can have a significant impact on retirement planning, earnings and benefits. To help clients navigate zigs and zags in their career paths, advisors need to take a big picture view, and help their clients do so as well. [...]

A lifelong career may be a relic of the twentieth century. 

So it’s likely financial advisors will find themselves with clients who are considering major career transitions. Such moves can have a significant impact on retirement planning, earnings and benefits. To help clients navigate zigs and zags in their career paths, advisors need to take a big picture view, and help their clients do so as well.

Before a client switches jobs, it’s important to ensure they’re on solid financial footing, says Preal Haley, a Greenbelt, Md.-based advisor with  Ameriprise. 

“A job transition can be an uncertain time, particularly if the client is leaving behind the corporate world for something more entrepreneurial,” says Haley. With this in mind, she focuses on ensuring the client has enough to cover three years’ of essential expenses as well as a substantial emergency fund in case the unexpected arises.

Sometimes clients may not realize how much they should be setting aside to ensure they’re fully protected during transitions. “Health insurance, life insurance and disability insurance might have been part of their benefits package, and now they’ll have to cover those costs themselves,” says Haley. “Doing so can help you prepare for the certainty of uncertainty.”

If the idea of saving up for three years of expenses is daunting to a client, Haley suggests they begin working part-time on their new venture before making a complete switch.

In addition to preparing clients for actual career shifts, advisors can use transitions to delve deeper and strengthen relationships, says Michael Rose of Rose Capital Advisors in Miami Beach, Fla. “When you change careers, it’s no different from having a child, getting married or getting divorced,” he says. “The implications affect your entire financial plan.”

Earlier this year, Rose, whose firm manages $250 million, helped a client transition from a high-level and longstanding position at a bank to a more entrepreneurial role at a hedge fund. While the client had previously always put off estate-plan updates, Rose persuaded him to use a six-week “garden leave” between positions to conduct the long-overdue review, going over “absolutely everything from beneficiaries to changes in estate tax laws to insurance coverage, to ensure everything was up-to-date,” the FA says.

When switching jobs, clients often focus on their salary and bonus, says Stacy Lewis, an advisor with TrueWealth in Atlanta. “But it’s usually not an apples-to-apples comparison,” says Lewis, who works primarily with corporate executives. “And it’s the advisor’s role to help a client understand that.” 

Differences in pensions, retirement benefits and stock options can make certain offers more or less attractive than they may seem at first. Executives who have to relocate for a new position often neglect to take cost-of-living changes and state-by-state tax differences into their calculations. “Someone who’s used to making $250,000 base pay plus bonuses in Atlanta needs to understand that that salary is not going to give them the same lifestyle in New York,” Lewis says, whose employer manages about $1 billion. 

But at the end of the day, clients often make their decisions based on emotion. “Typically, someone isn’t going to entertain an outside offer unless they’re not happy — they feel stifled, or they want a change,” says Lewis. “And so even if the new position isn’t as lucrative, the emotional factors make it worthwhile.”

November 30, 2015

Fort Worth, TX-Based Wealth Management Firm, Point Bridge Capital, Celebrates Two Year Anniversary, Moves to Larger Offices

Point Bridge Capital, headquartered in Fort Worth, Texas, announced today that it is celebrating its two year anniversary with a move to new larger office space at One City Place in Downtown Fort Worth. [...]

NOVEMBER 30, 2015. Point Bridge Capital, headquartered in Fort Worth, Texas, announced today that it is celebrating its two year anniversary with a move to new larger office space at One City Place in Downtown Fort Worth.

Point Bridge Capital’s new offices on the 15th floor were custom built over the past few months with a modern design to complement the modern concept of One City Place.

The company was founded by Hal Lambert in 2013 as a continuation of his business established with investors over the past 15 years. Point Bridge manages assets for ultra high net worth families and foundations across the United States. Mr. Lambert previously managed assets at Credit Suisse, JP Morgan, and Taylor & Company within the Bass family organization.

According to Mr. Lambert, “At Point Bridge, we have had tremendous momentum over the last two years as an independent investment management and capital advisory firm. Our extensive portfolio management experience has had good traction among institutions, business owners and high net worth clients across Texas, the Southwest and the U.S.”

Point Bridge Capital is a member of the Dynasty Network of leading independent advisors in the U.S.


About Point Bridge Capital

Point Bridge is an investment management and capital advisory firm that advises across a broad spectrum of asset classes including private equity, alternative assets, and corporate advisory. With offices in Dallas and Fort Worth, TX, Point Bridge Capital provides unparalleled, institutional-quality capital advisory services to the ultra high net worth, family office, and institutional clients. Point Bridge specializes in investment management, manager search/advisory, lending, and M&A advisory. The firm offers its clients true open architecture, where everything from asset custody to execution is tailored to the client’s specific needs, requests and risk tolerance, with competitive pricing unavailable through normal channels.

November 17, 2015

Financial Planning Firm, Sentinus, Doubles It's Team and Relocates Corporate headquarters To Oak Brook After 70 Years In Business

After nearly 70 years in business, Sentinus (formerly Reynolds Financial Group), an Illinois-based wealth management firm, announces its relocation from Joliet to Oak Brook to accommodate the company’s expo [...]

OAK BROOK, IL – November 17, 2015 – After nearly 70 years in business, Sentinus (formerly Reynolds Financial Group), an Illinois-based wealth management firm, announces its relocation from Joliet to Oak Brook to accommodate the company’s exponential growth over the past year and expected client expansion into 2016. The new 5,374 -square-foot headquarters located at 700 Commerce Dr., Suite 170 will offer increased capacity for the high-touch boutique financial firm as it more than doubles its team to meet the demands of an ever-growing portfolio of high net worth clients and business owners.

“Our company was founded by my father 70 years ago, and we’ve had a long, successful history serving generations of families just like ours,” said Scott Reynolds, CEO of Sentinus. “Helping our clients meet their financial goals remains at the core of every decision we make as a firm, and this move will allow us to attract top talent and continue to provide the personal service for which we are known.”

Sentinus is a family-owned, financial planning firm that focuses on providing a fee-based approach through a philosophy of clarity and transparency with its clients. The firm and its 17 employees offer a variety of financial services to individuals and businesses and became an independent SEC Registered Investment Advisor (RIA) in 2012.
The firm will retain an office in Joliet to remain easily accessible to clients in that area.

“We truly appreciate the Joliet community for housing our company for so many years,” said Tyler Qualio, President of Sentinus. “Our new headquarters puts us closer to dozens of clients downtown and provides us a centralized location to reach even more people seeking financial strategy and guidance.”

New Hires
To build on their individualized client-focused approach, Sentinus recently welcomed several strategic new hires, including four advisors, with a breadth of financial industry experience.

“Our family-run culture is very important to us and we’ve hand-picked a group of financial advisors with exceptional client service skills and knowledge to support the firm’s growth and diversify our capabilities to best meet our clients’ growing needs,” said Qualio. “It’s a really exciting time here at Sentinus as we welcome these new leaders to our team.”
Jim Davenport: Jim Davenport served a six-year tenure at Charles Schwab, where he acted as Vice President, Financial Consultant and Registered Representative. He worked closely with organizations, executives and their families to develop comprehensive financial plans and filled in the gaps with personalized wealth management solutions. Attune to the fact that no client situation is alike, he appreciates the trust his clients have in him to tackle and conquer their unique challenges. Davenport is a graduate of Northern Illinois University with a Bachelor’s Degree in finance. He holds the industry designation of Accredited Asset Management Specialist in addition to insurance and five securities licenses. He is currently working toward a Certified Financial Planner (CFP) designation.

Ann Gunst: Ann Gunst has more than 15 years of experience in the financial services industry, with more than a decade spent in financial consulting and accounting. Gunst’s background making financial decisions and tax consideration for her family’s successful manufacturing business gives her a unique insight for corporate clients and small business owners. A former Vice President of Finance for Strategic Management Advisors, Gunst successfully completed the rigorous process of earning a CFP designation, allowing her to bring a holistic approach to clients. Ann graduated Magna Cum Laude with a Bachelor’s Degree in accounting from Indiana University’s Kelley School of Business. She is also a CPA and a Certified Divorce Financial Analyst (CDFA TM).

Kevin Cooney: Kevin Cooney has been in the financial services industry for more than 25 years. He works primarily with individuals, families and small businesses to develop and focus on building fully comprehensive financial plans. Cooney is a Registered Investment Advisor Representative, Registered Representative and Licensed Life Producer. Kevin spent much of his finance career trading and managing options and futures on the trading floor for his own personal account, enabling him to become acutely aware of risk and volatility as it relates to investing. Cooney received a Bachelor of Arts from St. Mary’s University and holds an industry designation of AIF.

Greg Johnson: Greg Johnson has 25 years of experience working with individuals, entrepreneurs and businesses to help identify and reach their long term goals, assess strengths and weaknesses, and determine strategic opportunities to create long term value. He is a Registered Investment Advisor Representative providing full-service planning and founder of Coldwater Financial, LLC, a mergers and acquisitions consulting firm. Johnson was also an investment banker for Bear, Stearns & Co., and worked in the merchant banking division of Koch Industries, where he analyzed and advised on M&A transactions, joint venture opportunities, and domestic and international opportunities. He began his career at Northern Trust Company in their corporate trust department analyzing corporate pension plans. Greg is a graduate of Creighton University and received an MBA with a concentration in finance and accounting from the University of Chicago’s Booth School of Business.

To learn more about Sentinus, visit www.sentinus.com.

About Sentinus
Founded in 1946 by WWII veteran Richard A. Reynolds, Reynolds Financial Group was a responsible and progressive wealth management firm with a focus on customer service. The company began offering fee-based comprehensive financial planning coupled with risk-based asset allocations in 1978, which put them ahead of the curve in helping their clients build unique and diverse investment plans to meet their financial goals. In 2012, the company moved to independence and rebranded with the Sentinus name, which provided an opportunity for client growth and a more streamlined, effective client experience with greater hands-on management and service.

November 09, 2015

Leading $700 Million Denver, CO-Based Wealth Management Team, Cardan Capital Partners, Launches as an Independent Advisory Firm

Dynasty Financial Partners today announced its partnership with Cardan Capital Partners, the most recent independent advisory firm to leverage Dynasty Financial Partners’ industry-leading platform of integrated [...]

NEW YORK--(BUSINESS WIRE)--Dynasty Financial Partners today announced its partnership with Cardan Capital Partners, the most recent independent advisory firm to leverage Dynasty Financial Partners’ industry-leading platform of integrated wealth management services and technology.

Founding Partners Ross Fox, Matthew Papazian, Marti Awad and Sarah Keys launched Cardan Capital Partners as an independent advisory firm after leaving Merrill Lynch. With client assets more than $700 million, Cardan Capital Partners immediately becomes one of the largest independent advisory firms in Colorado.

Based in Denver, Colorado, the firm works with corporate executives, professionals, business owners and entrepreneurs in Denver, Vail and Aspen as well in major markets nationwide. Cardan Capital Partners collaborates with attorneys, accountants and other advisors to understand their clients’ full financial picture and works with the children of their clients to educate them on investments, financial management and charitable giving.

The team chose the name ‘Cardan’ to reflect their approach to wealth management. The name comes from the ‘cardan’ suspension, a navigational tool used in sailing to ensure a ship’s stability and balance in both calm and rough waters.

“We have always strived for excellence by embracing the most innovative and progressive trends in the financial services industry. The continued evolution of technology and strategic partners in the independent space have made the independent model compelling for our clients and for us,” said Mr. Fox, Managing Partner at Cardan Capital. “Many of our clients appreciate being in the mountains and have vacation homes in ski resorts. We have a passion for serving clients both in the state and those who may be at a distance but who have a deep connection with Colorado.”

"The Cardan Capital Partners team is poised for expansion – both by adding advisors and expanding their geographic footprint," said Shirl Penney, President and CEO of Dynasty Financial Partners. "We look forward to partnering with them as they build their business and we are proud to add them to our Network of truly independent advisors.”

According to Tim Bello, Partner and Head of Network Development at Dynasty, “With their newly launched independent firm, we expect that the Cardan Capital team will have even greater success building out their business and will become the firm that successful advisors in Colorado and other independent minded advisors in the region will seek to join.”

Cardan Capital Partners will be utilizing Dynasty’s financial services platform of integrated wealth management services and technology. Dynasty's groundbreaking investment platform integrates industry-leading proprietary technology, research access, analytical tools, and the support of Dynasty’s home office investment team members. Cardan will also leverage Tamarac’s and Envestnet's state-of-the-art portfolio tools and reporting technology. Schwab will provide custody services with Market Counsel providing ongoing compliance support.

For more information, please visit www.CardanCapital.com.

October 19, 2015

$1 Billion ex-Barclays Team Joins Start-Up Wealth Firm
Financial Advisor IQ

After seven years at Barclays in New York, advisor Jerry Lucas left Oct. 9 to join an independent RIA, Summit Trail Advisors. Joining him were three partners in a practice that managed $1 billion as part of the British bank’s U.S. wealth-management unit. [...]

After seven years at Barclays in New York, advisor Jerry Lucas left Oct. 9 to join an independent RIA, Summit Trail Advisors. Joining him were three partners in a practice that managed $1 billion as part of the British bank’s U.S. wealth-management unit.

Q: Did the recent decision by Barclays to sell its advisory business in the U.S. to Stifel Financial play a role in your decision to break away?

A: The decision by Barclays was a catalyst for our team to undertake a serious review of the best options for our clients going forward. In a rapidly changing wealth-management industry, we felt like it was a good time to reassess our business and objectively look at all of the possibilities in the market today.

Q: Did you consider moving to a wirehouse or other large global bank?

A: Yes, that was a natural first step for us to consider. We also took a close look at staying with Stifel. But our journey in evaluating different options led us to consider the independent space. In fact, once Barclays’ decision was announced in early June, our clients started asking how the Stifel deal would affect their situations. We realized that change could be very unsettling, so we let them know right away that we were in the midst of an in-depth review of our options.

Q: Did your past relationship with Jack Petersen, another ex-Barclays advisor and cofounder of Summit Trail, make the process easier?

A: Yes, our team had a long-term relationship working with Jack’s team at Barclays. Our teams also worked closely together at Lehman Brothers for years, when Jack served as Lehman’s global head of private wealth management. So the launching of his independent firm with several of his partners was a natural point of interest for us in reviewing all of our options. Our final analysis was that the way Summit Trail was going about building its business would provide the best outcome for our clients.

Q: How so?

A: The independence of Summit Trail coupled with the partnership for front-, back- and middle-office support from Dynasty Financial Partners made for a very compelling combination. In particular, bringing access to our advisors to best-in-breed technologies that aren’t constrained by legacy infrastructure systems was a huge selling point.


Q: Did you see any other advantages?

A: Now, we’re able to offer our clients more choices in custodians. Before, their only option was Pershing. On the investment side, we really thought that Barclays had provided our clients with a good platform. But as an independent, we’re finding even more freedom of choice. That’s particularly true for ideas that are proprietary in nature and would never scale at the bigger firms.

Q: Could you provide an example?

A: When a client comes to us with a problem like owning a concentrated multi-million dollar position in a private-equity venture, we now have the ability to fully evaluate the best options for reducing such a risk. At a large global bank, that type of a portfolio analysis might be too small for their specialists to get involved in.

Q: How do you see joining Summit Trail as helping your team’s future growth prospects?

A: Working in an RIA that is providing unconflicted advice is a very powerful tool for growth. We believe that our team will have more opportunities to serve more sophisticated investors by having available a broader menu of products and services.

Q: Do you expect that to result in lower fees for your clients?

A: We expect they’ll pay roughly in line with what they had been paying in the past, but with far greater transparency in terms of costs. With that transparency, we think our clients will benefit from gaining much greater insights into all of their investment choices.

Q: How will your compensation be affected?

A: We had two choices. One was to accept a traditional type of offer with significant up-front payments. However, we’ve chosen to take the path of becoming an equity partner in Summit Trail. We believe that is the best way to align our business interests with making sure that we’re doing right by our clients.

Q: What advice would you give someone else going through this decision process?

A: If you’re mainly a transactional-based broker, then a wirehouse might be a good choice. But if your business is primarily based on advisory fees, then it’s going to make a lot of sense to thoroughly examine all your options — in both the traditional and the independent advisory channels.
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October 21, 2014

Michelle Smith, CEO Of Source Financial Advisors, Launches Proprietary Coaching Program for Advisors: ‘Anatomy of a Specialist’

New Program Is Being Rolled Out Nationally at Financial Planning Magazine Women’s Advisor Forum in Chicago on October 21, 2014 New York, NY. October 21, 2014. Leading advisor and entrepreneur Michelle [...]

New Program Is Being Rolled Out Nationally at Financial Planning Magazine Women’s Advisor Forum in Chicago on October 21, 2014
New York, NY. October 21, 2014. Leading advisor and entrepreneur Michelle Smith, CEO and co-founder of Source Financial Advisors, is launching her proprietary coaching program for advisors, ‘Anatomy of a Specialist’, at the Financial Planning Magazine Women’s Advisor Forum in Chicago on October 21, 2014.

The genesis of the coaching program is Michelle Smith’s nationally recognized status as one of North America’s top specialists in divorce financial planning. After a decade of specialized business planning, proprietary strategy, and execution of her divorce specialization, Ms. Smith has been a mentor and a coach for hundreds of advisors in helping them build and expand their business by ‘finding their inner specialist and niche’.

“If you have a medical issue, you Google a specialist, not a generalist. In order to grow your practice exponentially, you must find your niche and specialty,” said Ms. Smith. “Using the system I cultivated and created to become a top national thought leader in the divorce financial specialty space, my coaching program, ‘Anatomy of a Specialist,’ delivers the same process and strategy to help other firms and advisors stand out and become the go-to expert in their unique space.”

Source Financial was founded in New York City in 2012 and built for financial advisors who want a home for themselves and their clients. Source offers a dedicated coaching team and asset management platform, powered by Dynasty Financial Partners, to elevate them to the top of their chosen specialty.

Kristen Niebuhr, President and COO of Source, said, “At Source, we put a premium on coaching and advising financial advisors. The ‘Anatomy of a Specialist’ coaching program has made a significant difference to advisors in expanding their businesses.”
There will be limited acceptance into Smith and Source Financial’s ‘Anatomy of a Specialist’ program. Firms and advisors can apply by emailing Mark Lingenfelter at Source Financial: Mlingenfelter@sourcefa.com

About Source Financial Advisors



Source Financial Advisors is an independent RIA formed in 2012, based in New York City. Named the 5th fastest growing firm in 2014 by Financial Advisor Magazine, Source Financial and its advisors have specialties in significant financial transactions and events in clients lives. Divorce is one of the key specialties of the firm, and Source Financial has a platform and infrastructure built for advisors interested in building a brand in a specialty niche business. Michelle Smith is a member of the Institute for Divorce Financial Analysts, a holder of the Certified Divorce Financial Analyst credential, and a Divorce Mediator. She is a veteran of Wall Street financial services firms, having spent over two decades as a financial advisor at Merrill Lynch, Paine Webber, and Wachovia Securities. Source Financial Advisors is a member of the Dynasty Financial Partners Network of Advisors. For more information, please visit www.sourcefa.com.

October 06, 2014

Leading Kansas City Team Partners with Dynasty Financial Partners To Launch NovaR Wealth Advisors

Dynasty Financial Partners today announced NovaR Wealth Advisors is the most recent independent investment advisory firm to leverage Dynasty Financial Partners’ industry-leading platform of integrated investment services and technology. Financial advisors Timothy Rodgers (Principal), K [...]

Dynasty Financial Partners today announced NovaR Wealth Advisors is the most recent independent investment advisory firm to leverage Dynasty Financial Partners’ industry-leading platform of integrated investment services and technology.

Financial advisors Timothy Rodgers (Principal), Keith Osborne (VP, Financial Advisor), Brian Fry (Client Services Associate), and Billi Wood (Office Manager) all join NovaR Wealth Advisors from Wells Fargo. The team collectively advises on more than $400 million in client assets.

“Establishing NovaR Wealth as an independent firm allows us to best serve the individuals, professionals, entrepreneurs, business owners and executives who are our clients,” said Tim Rodgers, CEO of NovaR Wealth. “We are deeply committed to the Kansas City market and we remain dedicated to providing our clients with objective, transparent advice and investment counsel. With NovaR Wealth as an independent firm through Dynasty, we now have access to a much wider selection of financial resources.”

“Tim and his team have tremendous experience and an established presence in Kansas City. As an independent firm, they are committed to providing the best advice and investment solutions to their clients,” said Shirl Penney, President & CEO of Dynasty Financial Partners. “Dynasty is proud to be NovaR Wealth’s transition and growth partner and to add individuals of this quality to our Dynasty Network of truly independent advisors.”

NovaR Wealth selected Fidelity Investments® to provide custody services for their clients, PKS to provide brokerage services and MarketCounsel as counsel for the initial launch and to manage their regulatory compliance program.

About Timothy Rodgers:

In addition to his role of CEO of NovaR Wealth, Mr. Rodgers leverages his experience with portfolio management, investment research, financial and retirement planning into developing and implementing strategies that serve the complex needs of individual clients, families and business owners.

He has built his expertise and reputation through 30 years in the financial services industry, most recently as Managing Director of Investments at Wells Fargo Advisors. He was also a Senior Vice President at A.G. Edwards, where he spent twenty years. He began his career at Stern Brothers, reaching the position of Vice President of Investments.

Mr. Rodgers attended the University of Missouri–Kansas City School of Business before achieving his Certified Financial Planner™ (CFP®) certification. In addition to other leadership roles, he serves on the Board of Trustees of the Shawnee Mission Medical Center and has been a member of the Foundation Board of SMMC since 1992.

About Dynasty Financial Partners

Dynasty Financial Partners is the leading independent integrated platform service provider to the industry’s elite advisor teams. Dynasty develops, sources and integrates the finest wealth management capabilities, solutions and technology into its customized open-architecture platform to help independent advisors protect and grow their clients’ wealth. Dynasty’s core principle is “objectivity without compromise”, and the firm is committed to crafting solutions that allow investment advisors to act as true fiduciaries to their clients. For more information, please visit www.dynastyfinancialpartners.com and follow us on Twitter @DynastyFP.

April 08, 2014

Archford Capital Strategies, Transforms ESOP Repurchase Obligations; Launches First FDIC-Insured Market Participation CD for ESOPs

Innovative ESOP Offering Required Official FDIC Ruling, Legal Opinion And Patent Filing Champaign, IL, April 7th 2013– Archford Capital Strategies, an independent wealth management firm based in St. Loui [...]

Innovative ESOP Offering Required Official FDIC Ruling,

Legal Opinion And Patent Filing

Champaign, IL, April 7th 2013– Archford Capital Strategies, an independent wealth management firm based in St. Louis, MO and Swansea, IL, announced the launch of their innovative FDIC-insured bank issued Principal Protected Investment, the Archford series Market Participation Certificates of Deposits (CDs) for Employee Stock Ownership Plans (ESOP).

The announcement took place at the Illinois chapter of the ESOP Association 2014 Conference on March 6th where Archford Capital Founder and CEO Jim Maher presented the application of FDIC Market Participation CDs for ESOP companies.

Market Participation CDs aren’t new, but broader FDIC insurance coverage for ESOPs, longer maturities, and software makes the Archford offering truly the first of its kind in structured products.

According to Mr. Maher, “Fiduciaries, trustees, and corporate officers want principal protection without sacrificing returns. This strategy over a period of time should better mirror investment performance to their future repurchase liabilities of their growing company. It also helps provide ESOP Trust participants with the potential for better returns in their Other Investment Account.”

Archford identified a gap in traditional risk adverse investments that could be used to match future repurchase obligations (and even healthcare, education or pension expenses). Working with large banking institutions to customize an existing investment product, the result is their Market Participation CD. It’s designed to reduce risk by protecting the investment principal with FDIC coverage and participates in potential equity market index gains when held to maturity.

Tom Petrone, Director of Capital Markets for Dynasty Financial Partners, said, “Jim Maher has worked on this project for over a year. By leveraging Dynasty’s knowledge of structured investments and pulling together legal, regulatory and technology solutions, Jim has identified a practical solution to complex issues faced by Employee Stock Ownership Plans.”

Archford’s innovative approach to Market Participation CDs is meant to help ESOPs plan ahead to better meet future repurchase obligations. As companies increase in value and employees edge closer to retirement age, this needs to be planned for carefully. By laddering the Market Participation CDs, sponsors create an attractive opportunity to keep pace. They provide for the repayment of the principal in full at maturity (just like any traditional CD). By including a market component based on major indices (S&P 500, Dow and others), they hold the potential for capital appreciation similar to equities as well.

When the investment goes through the ESOP trust and not a company’s balance sheet, FDIC insurance protection applies to every plan participant—what’s known as pass-through FDIC insurance coverage per financial institution. Because of the inherent complexity in managing all this FDIC coverage, Archford has licensed a proprietary cloud-based software program that does all the FDIC tracking, providing real-time situational awareness for sponsors of their exposure to any financial institution. More information on this software can be found at www.fdiccalc.com.

Aimed at Plan Sponsors in primarily closely-held and middle-market C- and S-Corp companies, Archford Market Participation CDs are mainly designed to diversify portfolios, reduce risk and match investments to future liabilties.

Obligations Solutions

For Jim Maher and his team at Archford, the drive for innovation stems from his interest in psychology and behavior. “Why people or organizations are doing, or not doing, something they should is one of the questions that drives my career,” says Mr. Maher. “I believe that companies need to plan for ESOP repurchase obligations.”

According to the Employee Ownership Foundation, “13% of companies surveyed said they would cease to exist because of the burden of future repurchase liabilities.” The NCEO Repurchase Obligation Handbook also states that mature ESOPs (greater than 10 years) are currently repurchasing between 2-5% of their stock on an annual basis.

An ESOP is statutorily required to repurchase a departing participant’s shares (called a put) upon events like retirement or termination. To that end, the ESOP and its repurchase obligation are supposed to be managed in such a way as to ensure that the statutory requirements are met.

“In an industry as mature as ours, how could there not be a set of best practices for addressing these responsibilities and obligations?” asked Mr. Maher.

Archford received a favorable ruling from the FDIC and a legal opinion letter on the application of the Market Participation CDs. This confirmed that ESOPs, Defined Benefit Plans and Defined Contribution Plans are able to take advantage of each plan participant’s FDIC Insurance coverage per financial institution. This investment also provides the upside potential of participation in market index returns over the life of the investment when held to maturity.

About Archford Capital Strategies

Archford Capital Strategies, a private wealth management firm founded by James D. Maher, is represented by a skilled team of wealth management advisors with more than 20 professional designations, accreditations and certifications. Based in St. Louis, Missouri, Archford Capital Strategies offers a wide range of financial services to clients and closely held businesses. They offer planning solutions for concentrated stock strategies, foundation management, retirement plan management, credit needs, and wealth transfer strategies. They specialize in Business Transition and work with closely held businesses on business valuation, buyer intelligence, ESOP structures, transition and liquidity strategies.

For more information, please visit www.archfordcapital.com.

March 06, 2014

Leading Portland, OR-­‐Based Wealth Management Advisors Join Forces to Launch Cable Hill Partners as an Independent Advisory Firm

Dynasty Financial Partners today announced its partnership with Cable Hill Partners, the most recent independent investment advisory firm to leverage Dynasty Financial Partners’ industry-­‐leadin [...]

Dynasty Financial Partners today announced its partnership with Cable Hill Partners, the most recent independent investment advisory firm to leverage Dynasty Financial Partners’ industry-­‐leading platform of integrated wealth management services and technology. Financial advisors David Christian, Jeffrey Krum and Brian Hefele, Registered Senior Client Associates Kendra Biller and Amanda Peters and Client Service Associate Melissa Rennie all join Cable Hill Partners from the Portland, Oregon office of Merrill Lynch.

David Christian was recently ranked in the Barron’s 2014 Top Advisor Rankings as one of the top advisors in the state of Oregon. The three advisors collectively advise on more than $700 million in client assets.

“Cable Hill Partners was created to provide advice at a higher level. ‘Cable Hill’ is a Portland historical reference to a landmark cable car that serviced Portland; our goal is to transport our clients to a higher place with consistency and predictability,” said Mr. Christian. “As an independent financial and investment planning firm, we want to provide our clients—high-­‐net-­‐worth individuals, families, small and private businesses, entrepreneurs, executives, foundations and endowments—with complete objectivity and transparency.”

“The Cable Hill team has really hit the ground running as an independent advisory team, ” said Tim Bello, Partner, Director of Network Development at Dynasty. “They will be a key player in the future in the Pacific Northwest with their entrepreneurial drive.”

The company will access Dynasty’s groundbreaking investment and technology platform, which leverages Dynasty’s investment committee and internal investment operations team. Fidelity Investments will provide primary clearing and custody services.

“The Cable Hill Partners team consists of two advisory teams combining to create a new independent RIA. This new firm immediately becomes one of the largest RIAs in the Northwest. David, Jeff and Brian are extraordinary investment advisors with a deep commitment to the Portland community,” said Shirl Penney, President and CEO of Dynasty Financial Partners. “Dynasty is excited to be their transition and growth partner, and we are proud to add them to our Dynasty Network of truly independent advisors.”

David Christian, Founding Partner, Managing Director, CFP®, CAP® As a Certified Financial Planner™ and a Chartered Advisor in Philanthropy® certificate holder, David has built his expertise and reputation by servicing the complex needs of high-­‐net-­‐worth individuals and their families. David was named as one of “America’s Top 1,200 Advisors”* by Barron’s Magazine for 2014, which represents the top 1% of the Wealth Management industry. He ranked #12 within the State of Oregon in the same Barron’s list.

David began his career in the financial services industry with Merrill Lynch in 1998, after earning his BS in Finance from Oregon State University. He is a leader of the financial planning effort at Cable Hill Partners and sits on the Investment Committee.

Jeffrey Krum, Founding Partner, CIMA®

Jeff is a Certified Investment Management Analyst® with over 30 years of investment industry experience. Jeff leads the Investment Committee at Cable Hill Partners. Prior to forming Cable Hill Partners, he spent the entirety of his professional investment career at Merrill Lynch. Jeff’s responsibilities included serving as a guest educator at Merrill’s Financial Advisor Training School in Princeton and also chairing that firm’s Advisory Council to Management.

Jeff holds a BA in Economics and Business Administration from Lewis and Clark College.

Brian M. Hefele, Founding Partner, CFP®, CIMA®

A holder of both the Certified Financial Planner™ and Certified Investment Management Analyst™ designations, Brian brings over 19 years of experience to the firm from advising and managing client relationships and investment portfolios at Merrill Lynch.

Brian has a BA in Economics from Boston College, and has a leadership role in both the Investment Committee and the financial planning deliverables for Cable Hill Partners. He is an active member of Friendly House and Big Brothers Big Sisters.

Kendra Biller, Relationship Manager

Kendra has been in the investment advisory and management industry for over 15 years, and spent the last 13 of those at Merrill Lynch. She works with clients assisting them with goal discovery, financial planning and cash management solutions. She is a graduate of the University of Idaho, holding a BS in Secondary Education.

Amanda Peters, Relationship Manager

Amanda works closely with our clients and advisors on a day-­‐to-­‐day basis to provide excellent and extensive service. She brings over ten years of prior experience working with Wealth Management clients to Cable Hill Partners, and has a leadership role in the firm’s client service execution.

Originally from Miami and a graduate of the University of Florida with a BA, Amanda moved to Portland in 2004.

Melissa Rennie, Client Service Associate

Melissa is a native Oregonian with a BA in Psychology from Saint Marten’s University. She is responsible for serving client relationships, supporting the Cable Hill Partners advisors and overseeing/managing various administrative functions for the firm.

About Cable Hill Partners

Cable Hill Partners – Private Wealth Management was created to provide advice at a higher level. In electing to become a registered investment advisor, Cable Hill is required to follow the fiduciary standard. In this capacity, we will place the needs of our clients above all other interests—including our own. Our move to independence means we are no longer limited by the constraints or conflicts of interest that arise in a large corporate environment. Instead, we can provide truly objective advice, an elevated level of personalized attention and access to a comprehensive array of offerings from leading financial services providers of our choosing. We are here to help clients choose the right course to help them achieve their goals, to infuse every decision they make with the utmost in confidence, and to help them see their financial lives with absolute clarity.

About Dynasty Financial Partners

Dynasty Financial Partners is the leading independent platform service provider to the industry’s elite advisor teams. Dynasty develops, sources and integrates the finest wealth management capabilities, solutions and technology into its customized open-­‐architecture platform to help independent advisors protect and grow their clients’ wealth. Dynasty’s core principle is “objectivity without compromise,” and the firm is committed to crafting solutions that allow investment advisors to act as true fiduciaries to their clients. For more information, please visit www.dynastyfinancialpartners.com and follow us on Twitter @DynastyFP.

February 20, 2014

Leading Philadelphia-­‐Based Wealth Management Team Launches Concentus Wealth Advisors as an Independent Advisory Firm

Multi-Generational Strid Family Has Deep Ties To Community NEW YORK, NY, February 20, 2014 – Dynasty Financial Partners today announced its partnership with Concentus Wealth Advisors, the most recent independent investment ad [...]

Multi-Generational Strid Family Has Deep Ties To Community

NEW YORK, NY, February 20, 2014 – Dynasty Financial Partners today announced its partnership with Concentus Wealth Advisors, the most recent independent investment advisory firm to leverage Dynasty Financial Partners’ industry-leading platform of integrated wealth management services and technology. The team is joining the Dynasty Network from Wells Fargo Advisors and was formerly known as Strid Wealth Management Group.

The Concentus Wealth Advisors team consists of the following financial professionals all joining from Well Fargo Advisors:

Erik O. Strid, CFP®, ChFC, – Principal
Gerald “Zeke” Strid – Principal
Paul F. Strid – Principal
Nathan J. Hayward, CFP®, MBA – Director
Thomas J. Greco, MBA – Director

“Concentus Wealth Advisors was built around our desire to deliver independent, integrated and comprehensive wealth management advice and planning solutions to the families we serve. Our clients are notable for their expertise at creating and accumulating wealth. They’re dedicated to building businesses, raising families, shaping communities and creating lasting, meaningful legacies,” said Erik Strid, Principal of Concentus Wealth Advisors. “We built this family business with the mission to help these families manage the complexity and responsibility of their wealth. We are looking forward to significantly growing our business as an independent RIA.”

The company will access Dynasty’s groundbreaking investment platform, which integrates industry-leading proprietary research from Wilshire Associates and Callan Associates and Envestnet’s state-of-the-art portfolio tools and reporting technology. Charles Schwab will provide clearing and custody services.

“The Concentus Wealth Advisors team consists of extraordinary investment advisors who have built a remarkably successful family-based business with a deep connection to their community. With their newly launched firm, we expect they will have even greater success,” said Shirl Penney, President and CEO of Dynasty Financial Partners. “Dynasty is excited to partner with Erik and Paul Strid and their team, and we are proud to add them to our Network of truly independent advisors.”

Biographies

Erik O. Strid, CFP®, ChFC | Principal

With over 20 years of industry experience, Erik guides the overall investment planning and portfolio strategy of our group. After graduating from Amherst College in 1991, Erik spent a year working with Rittenhouse Capital Management, before joining Gerry in 1992. Erik currently holds his general securities registrations and insurance licenses, as well as CERTIFIED FINANCIAL PLANNER™ and Chartered Financial Consultant designations. He serves on the boards of the Philadelphia Chapter of the Salvation Army, Acting Without Boundaries (serving young people with disabilities) and Rosemont School of the Holy Child. In addition, he is on the financial advisory board of the Sisters of St. Francis in Media, PA. Erik resides in Bryn Mawr, PA with his wife and three children.

Gerald D. Strid | Principal

Gerry Strid graduated from Villanova University in 1966 and leads our team with over 40 years of experience in the Financial Services industry. Gerry spent the majority of his career as a “Circle of Excellence” Financial Advisor at Merrill Lynch, before leaving to form the Strid Wealth Management Group in 2003. He has devoted much of his time and energy to support Project H.O.M.E, a non-profit outreach program in Philadelphia. Gerald resides in Villanova, PA with his wife and has five children.

Paul F. Strid | Principal

Paul manages the day-to-day operations of the team. After graduating with a Finance degree from Georgetown in 1997, Paul spent three years working for Credit Suisse First Boston in New York on their institutional sales desk and then as Director of Global Equities Information Technology. Paul joined the Strid Wealth Management Group in 2003. Paul resides in Berwyn, PA with his wife and four children.

Nathan J. Hayward, CFP®, MBA | Director

Prior to joining the Strid Wealth Management Group in 2008, Nathan worked with the Kessler Baker Wealth Management Group. Nathan graduated from Arcadia University with a Bachelor of Arts degree in Economics & Business Administration and then received his International MBA from Arcadia University in 2009. In addition, Nathan has received his CERTIFIED FINANCIAL PLANNER™ designation. He currently serves on the executive committee for the Arcadia University MBA Alumni Association, is an active finance committee member of the Scleroderma Foundation (Delaware Chapter) and participates with the non-profit organization Yoga Unites as the active Treasurer. A native of Bermuda, Nathan currently resides in Berwyn, PA.

Thomas J. Greco, MBA | Director

Thomas joined Strid Wealth Management in the spring of 2010 with twelve years of experience in the financial services industry. His previous experience was with The Vanguard Group and Turner

Investment Partners. Thomas graduated Bloomsburg University in 2002 with a B.S. in Finance. He also earned his MBA from St. Joseph’s University with a concentration in Finance.

Thomas resides in Chester Springs, PA with his wife and two children.

About Concentus Wealth Advisors

As a family-based team of independent Registered Investment Advisors, Concentus Wealth Advisors is committed to helping high net worth families achieve their most important financial goals. Our advice goes well beyond the accumulation of assets to address virtually every aspect of their wealth. The detailed and disciplined process we follow with each client results in a personalized wealth management roadmap integrating investment strategy, family governance, estate planning, liability and life insurance solutions, philanthropic endeavors, real estate and more—for both today and tomorrow. Our completely objective and transparent service model allows us to act in a truly advisory and fiduciary capacity for our clients; each solution we present is drawn from the best of Wall Street and is presented entirely in the best interests of the families we serve. In today’s complex financial world, Concentus Wealth Advisors brings welcomed clarity, vision and results to our clients’ financial lives.

About Dynasty Financial Partners

Dynasty Financial Partners develops, sources and integrates the finest wealth management capabilities for the industry’s leading independent investment advisor teams. Dynasty offers a customized open-architecture platform of wealth management solutions and technology to help independent advisors protect and grow their clients’ wealth. Dynasty’s core principle is “objectivity without compromise,” and the firm is committed to crafting solutions that allow investment advisors to act as true fiduciaries to their clients. For more information, please visit www.dynastyfinancialpartners.com.
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November 12, 2013

New York-­‐Based $900 Million Wealth Management Team Launches Fusion Family Wealth as an Independent Investment Firm

New Firm is ‘Trusted Advisor to Trusted Advisors’ with Collaborative Relationships with Leading Accounting and Law Firms NEW YORK–(BUSINESS WIRE)– Dynasty Financial Partners today announced its partnership with Fusion Family [...]

Dynasty Financial Partners today welcomes Ed Friedman as Director of Strategic Relationships reporting jointly to Shirl Penney, President and CEO, and Ed Swenson, Chief Operating Officer of Dynasty Financial Partners.

Based in New York, Mr. Friedman’s responsibilities will include business development, management of key client relationships, and delivering practice management programs working with Dynasty’s Network Advisors. Mr. Friedman has been a consultant to the financial services industry after leaving HighTower Advisors in 2011. He worked at HighTower since 2008 as part of the founding management team and was, most recently, Director of Advisor Development for HighTower. Mr. Friedman also has a long career as a leader in wealth management having held branch management positions and senior wealth management roles at Morgan Stanley over the course of his career.

“I am delighted to welcome Ed to Dynasty Financial Partners. We continue to see an acceleration in our business with the number and the size of teams looking to join Dynasty’s Network and thus continue to look to add top intellectual capital to the team to support this growth,” said Shirl Penney, President and CEO of Dynasty Financial Partners. “Ed brings a unique perspective to Dynasty having experience in wirehouse world, independent space, and as a consultant to advisors around areas of practice management. He will be a great educator for advisors considering independence, and a great advisor advocate and coach for those in our growing network.”

Mr. Friedman said, “I am thrilled to be joining the Dynasty team. They have proven over and over that they provide the industry-leading platform for advisors seeking independence or to RIAs looking for a growth partner. I look forward to bringing my experience to Dynasty’s Network Advisors in helping them to achieve all their business goals.”

Ed Friedman Bio

Mr. Friedman began his career at Morgan Stanley in 1985 as a Financial Advisor and worked at the firm in increasingly senior positions reaching Executive Director, Complex Manager at Morgan Stanley Global Wealth management from 2004-2008. After that, he moved to HighTower Advisors as Director of Business Development, assisting in attracting the first 18 teams to HighTower Advisors. Mr. Friedman left HighTower in 2011 to become an industry consultant counseling advisors in areas of practice management, expense controls, vendor selection, organic and inorganic growth strategies, and succession planning.

About Dynasty Financial Partners

Dynasty Financial Partners develops, sources and integrates the finest wealth management capabilities for the industry’s leading independent investment advisor teams. Dynasty’s integrated platform services delivery offers a customized open-architecture platform of wealth management solutions and technology to help independent advisors protect and grow their clients’ wealth. Dynasty’s core principle is “objectivity without compromise,” and the firm is committed to crafting solutions that allow investment advisors to act as true fiduciaries to their clients. For more information, please visit www.dynastyfinancialpartners.com and follow Dynasty on LinkedIn and on Twitter @DynastyFP.

November 04, 2013

Leading $1 Billion Texas-­‐Based Wealth Management Team Launches Point Bridge Capital as an Independent Investment Management and Capital Advisory Firm

Firm with Extensive Expertise in Portfolio Management serves Institutions, Business Owners and High Net Worth Clients across Texas and the Southw [...]

October 28, 2013

OR-based TRUE Private Wealth Advisors Expands in the Pacific Northwest with Addition of Leading Advisory Team, The Opsahl Group

The Opsahl Group Joins TRUE in Portland, Continuing the Firm’s Rapid Growth in the Region SALEM, OR, October 28, 2013 – TRUE Private Wealth Advisors announced today that The Opsahl Group will join the firm. Ba [...]

The Opsahl Group Joins TRUE in Portland, Continuing the Firm’s Rapid Growth in the Region

SALEM, OR, October 28, 2013 – TRUE Private Wealth Advisors announced today that The Opsahl Group will join the firm. Based in Portland, OR, the team includes Senior Advisor Joseph Opsahl and Advisor Chris Hatfield joining from Merrill Lynch’s Private Client Group.

“We are delighted to welcome the quality, experience and expertise of Mr. Opsahl and his team into the TRUE partnership. This expansion demonstrates our focus on growth in the Pacific Northwest and ongoing commitment to provide the highest quality resources to high net worth families,” said Steve Altman, Founding Partner and Senior Wealth Advisor at TRUE. “Joe and Chris’s proactive, consultative approach is an ideal fit with the client-centric focus that TRUE embodies.”

Senior Advisor Joseph Opsahl is a CPA with nearly 30 years experience in the financial industry. Most recently, he spent four years with Merrill Lynch in their Portland office. Prior to that, he led a successful practice at Smith Barney for 21 years. Mr. Opsahl provides a wide range of wealth management, investment consulting and financial planning services to high-net-worth families, corporations, retirement plans and foundations. He leverages his proprietary process for advising clients in developing optimal plans for building, maintaining and transferring wealth. Before entering wealth management, Joe was a practicing CPA at an international accounting firm where he advised clients on a variety of tax and accounting matters. He earned his BS in Business Administration and Accounting from Portland State University.

According to Mr. Opsahl, “I did extensive due diligence in the independent space and reviewed the business models available. When I met the team at TRUE Private Wealth Advisors, it was an immediate fit. TRUE has developed the right model for both serving clients and supporting advisors. The partnership model is unique and fosters growth. Through their strategic partnership with Dynasty Financial Partners, they have the infrastructure in place to both remain dynamic and to serve complex client needs long-term.”

Advisor Chris Hatfield joins TRUE from Merrill Lynch’s Portland office. A native of McMinnville now settled in Portland, Chris received his bachelor’s in Business Administration with a concentration in Finance from Oregon State University. He is actively involved in both the Portland and McMinnville communities and serves on the Central Catholic Alumni Association Board, serves as Secretary of the South Portland Business Association and is a member of the McMinnville Area Chamber of Commerce.

Shirl Penney, President and CEO of Dynasty Financial Partners, said, “We are excited about this significant addition to the TRUE team. Dynasty remains committed to being their transition and growth partner, as they continue to add clients and advisors on the path to becoming one of the premier wealth management brands in the region.”

About The Opsahl Group

The Opsahl Group provides each of their clients with a personalized approach to simplifying, managing, growing, preserving and transferring their wealth. They have developed a proprietary consultative process for advising clients in formulating and executing plans for building and maintaining wealth. As a multi-faceted and experienced team, they manage and consult on assets held by individuals, families, retirement plans, corporations and foundations with a focus on goal-oriented results.

About TRUE Private Wealth Advisors

TRUE Private Wealth Advisors was launched in September 2012 as an independent, SEC-registered investment advisory firm. With offices in Salem and Portland, Oregon, TRUE Private Wealth Advisors provides an array of sophisticated services to meet the unique needs of clients including individuals, families and businesses. TRUE Private Wealth provides wealth planning, retirement and estate planning. For more information, please visit www.truepwa.com.

April 02, 2013

Leading Regional St. Louis, MO-Based Wealth Management Firm, Archford Capital Strategies, Launches as an Independent Financial Advisory Practice

Firm Focuses on Closely Held Companies, Entrepreneurs, Executives and Family Wealth; Deep Expertise in ESOPs and Retirement Plans New York, NY (April 2, 2013) Dynasty Fi [...]

Firm Focuses on Closely Held Companies, Entrepreneurs, Executives and Family Wealth; Deep Expertise in ESOPs and Retirement Plans

New York, NY (April 2, 2013) Dynasty Financial Partners today announced that Archford Capital Strategies becomes the most recent independent investment advisory firm to select Dynasty Financial Partners’ open-architecture platform of wealth management services and technology.

Based in the St. Louis Metro East area, Archford Capital Strategies is a private wealth management firm, founded by James D. Maher, a National Association of Board Certified Advisory Practices Regional Award Winner. Mr. Maher had previously worked as a leading advisor at Merrill Lynch since 2001. Formerly known as The Maher Group, Mr. Maher and his team created Archford Capital Strategies in 2013. Archford also has a second office location in Creve Coeur, MO.

“At Archford Capital Strategies, we specialize in business transitions. The ability to leverage Dynasty’s access to best in industry resources for our clients is a large part of what led us to partner with them. Many of our clients are business owners and we understand their needs at every point along the spectrum, from transition services to liquidity strategies, as they develop solutions for business continuation. We want to continue to even better serve individuals and families as an independent practice with more flexibility and freedom to focus on our clients’ specific needs and obligations,” said Mr. Maher. “With this move, we’ll also be able to continue investing in the depth and experience of our team to help our clients navigate through life’s financial hurdles.”

Tim Bello, Partner and Director of Strategic Implementation at Dynasty Financial Partners, said, “After a long and thoughtful process, Jim and his team determined that being an independent firm puts them in a better position to ensure that their client needs are being served first and foremost. And Archford Capital also has access to the widest platform of products and services, and the best investments and expertise available.”

“Jim and his team are extraordinary investment advisors who have built a remarkably successful business. With their newly launched firm, Archford Capital Strategies, we expect that they will have even greater success working with and serving client families and business owners,” said Shirl Penney, President and CEO of Dynasty Financial Partners. “At Dynasty, we are delighted to be a growth partner with Archford Capital Strategies and proud to add them to our Network of industry-leading independent advisors.”

Archford Capital Strategies will continue its award-winning work with families on their charitable giving, an important part of the firm’s practice. The firm also specializes in Employee Stock Option Plan (ESOP) business and retirement plans.

The company will access Dynasty’s groundbreaking investment platform, which integrates the industry-leading proprietary research of Callan Associates and Envestnet’s state-of-the-art tools, reporting services and technology.

Pershing Advisor Solutions LLC will provide clearing and custody services for Archford Capital Strategies. Archford will tap Wilshire Associates and Callan for institutional investment research and access to alternative investments.

Mark Tibergien, Chief Executive Officer of Pershing Advisor Solutions, said: “We’re delighted that Archford Capital Strategies has chosen Pershing Advisor Solutions for its custody and clearing services. One of the challenges in the advisory space is differentiating a business from the competition. Archford’s clearly defined focus should give it a definite competitive advantage. We wish them all the best.”

Archford Capital Strategies is the 17th independent advisory firm to join Dynasty’s wealth management platform and brings deep expertise in estate planning and working with closely held businesses to the Dynasty Network of advisors.

Jim Maher, CEPA, CRPC, CRPS, JD and CPA will be joined at Archford Capital Strategies by long-term team members:

* John R. Russo, CFA, CAIA, CRPC, Chief Operating Officer and Wealth Management Advisor

* Jerry L. West, CFA, CAIA, CRPC, Chief Investment Officer and Wealth Management Advisor

* Robert G. Schlueter, Jr. CRPC and CPA, Director of Operations and Wealth Management Advisor

* Tracy L. Winters, Assistant Branch Manager and Senior Registered Client Associate

* Julie A. Hanger, Senior Administrative Assistant

* Joshua E. Anderson, Associate Analyst

* Bernard E. Thebeau Jr. CRPS, Retirement Specialist

About Archford Capital Strategies

Archford Capital Strategies, a private wealth management firm founded by James D. Maher, is represented by a skilled team of six wealth management advisors with more than 16 professional designations, accreditations and certifications. Based in St. Louis, Missouri, Archford Capital Strategies offers a wide range of financial services to clients and specializes in closely held businesses, concentrated stock strategies, foundation management, retirement plan management and wealth transfer strategies. They specialize in Business Transition and work with closely held businesses on business valuation, buyer intelligence, ESOP structures and transition and liquidity strategies. For more information, please visit www.archfordcapital.com.

About Dynasty Financial Partners

Dynasty Financial Partners develops, sources and integrates the finest wealth management capabilities for the industry’s leading independent investment advisor teams. Dynasty offers a customized open-architecture platform of wealth management solutions and technology to help independent advisors protect and grow their clients’ wealth. Dynasty’s core principle is “objectivity without compromise,” and the firm is committed to crafting solutions that allow investment advisors to act as true fiduciaries to their clients. For more information, please visit www.dynastyfinancialpartners.com.

February 28, 2013

Octagon Financial Services, a Specialty Advisory Firm with a Focus on Professional Athletes, Aligns with Dynasty Financial Partners

One of the most recognized names in the financial arena among professional athletes, entertainers and celebrities, Octagon Financial Services (OFS), has become the most recent independent investment adv [...]

Firm Focuses on Closely Held Companies, Entrepreneurs, Executives and Family Wealth; Deep Expertise in ESOPs and Retirement Plans

New York, NY (April 2, 2013) Dynasty Financial Partners today announced that Archford Capital Strategies becomes the most recent independent investment advisory firm to select Dynasty Financial Partners’ open-architecture platform of wealth management services and technology.

Based in the St. Louis Metro East area, Archford Capital Strategies is a private wealth management firm, founded by James D. Maher, a National Association of Board Certified Advisory Practices Regional Award Winner. Mr. Maher had previously worked as a leading advisor at Merrill Lynch since 2001. Formerly known as The Maher Group, Mr. Maher and his team created Archford Capital Strategies in 2013. Archford also has a second office location in Creve Coeur, MO.

“At Archford Capital Strategies, we specialize in business transitions. The ability to leverage Dynasty’s access to best in industry resources for our clients is a large part of what led us to partner with them. Many of our clients are business owners and we understand their needs at every point along the spectrum, from transition services to liquidity strategies, as they develop solutions for business continuation. We want to continue to even better serve individuals and families as an independent practice with more flexibility and freedom to focus on our clients’ specific needs and obligations,” said Mr. Maher. “With this move, we’ll also be able to continue investing in the depth and experience of our team to help our clients navigate through life’s financial hurdles.”

Tim Bello, Partner and Director of Strategic Implementation at Dynasty Financial Partners, said, “After a long and thoughtful process, Jim and his team determined that being an independent firm puts them in a better position to ensure that their client needs are being served first and foremost. And Archford Capital also has access to the widest platform of products and services, and the best investments and expertise available.”

“Jim and his team are extraordinary investment advisors who have built a remarkably successful business. With their newly launched firm, Archford Capital Strategies, we expect that they will have even greater success working with and serving client families and business owners,” said Shirl Penney, President and CEO of Dynasty Financial Partners. “At Dynasty, we are delighted to be a growth partner with Archford Capital Strategies and proud to add them to our Network of industry-leading independent advisors.”

Archford Capital Strategies will continue its award-winning work with families on their charitable giving, an important part of the firm’s practice. The firm also specializes in Employee Stock Option Plan (ESOP) business and retirement plans.

The company will access Dynasty’s groundbreaking investment platform, which integrates the industry-leading proprietary research of Callan Associates and Envestnet’s state-of-the-art tools, reporting services and technology.

Pershing Advisor Solutions LLC will provide clearing and custody services for Archford Capital Strategies. Archford will tap Wilshire Associates and Callan for institutional investment research and access to alternative investments.

Mark Tibergien, Chief Executive Officer of Pershing Advisor Solutions, said: “We’re delighted that Archford Capital Strategies has chosen Pershing Advisor Solutions for its custody and clearing services. One of the challenges in the advisory space is differentiating a business from the competition. Archford’s clearly defined focus should give it a definite competitive advantage. We wish them all the best.”

Archford Capital Strategies is the 17th independent advisory firm to join Dynasty’s wealth management platform and brings deep expertise in estate planning and working with closely held businesses to the Dynasty Network of advisors.

Jim Maher, CEPA, CRPC, CRPS, JD and CPA will be joined at Archford Capital Strategies by long-term team members:

* John R. Russo, CFA, CAIA, CRPC, Chief Operating Officer and Wealth Management Advisor

* Jerry L. West, CFA, CAIA, CRPC, Chief Investment Officer and Wealth Management Advisor

* Robert G. Schlueter, Jr. CRPC and CPA, Director of Operations and Wealth Management Advisor

* Tracy L. Winters, Assistant Branch Manager and Senior Registered Client Associate

* Julie A. Hanger, Senior Administrative Assistant

* Joshua E. Anderson, Associate Analyst

* Bernard E. Thebeau Jr. CRPS, Retirement Specialist

About Archford Capital Strategies

Archford Capital Strategies, a private wealth management firm founded by James D. Maher, is represented by a skilled team of six wealth management advisors with more than 16 professional designations, accreditations and certifications. Based in St. Louis, Missouri, Archford Capital Strategies offers a wide range of financial services to clients and specializes in closely held businesses, concentrated stock strategies, foundation management, retirement plan management and wealth transfer strategies. They specialize in Business Transition and work with closely held businesses on business valuation, buyer intelligence, ESOP structures and transition and liquidity strategies. For more information, please visit www.archfordcapital.com.

About Dynasty Financial Partners

Dynasty Financial Partners develops, sources and integrates the finest wealth management capabilities for the industry’s leading independent investment advisor teams. Dynasty offers a customized open-architecture platform of wealth management solutions and technology to help independent advisors protect and grow their clients’ wealth. Dynasty’s core principle is “objectivity without compromise,” and the firm is committed to crafting solutions that allow investment advisors to act as true fiduciaries to their clients. For more information, please visit www.dynastyfinancialpartners.com.
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September 18, 2012

Bringing Back the Brand: Radnor Capital Management Reclaims its History and Launches as Independent Advisory Firm in Radnor, PA

Deep Expertise in Large Cap Value and Mid to Small Cap Socially Responsible Investing (New York., NY) September 18, 2012. Radnor Capital Management LLC has launched as the most recent independent investment adviso [...]

Deep Expertise in Large Cap Value and Mid to Small Cap Socially Responsible Investing

(New York., NY) September 18, 2012. Radnor Capital Management LLC has launched as the most recent independent investment advisory firm to select Dynasty Financial Partners’ open-architecture platform of wealth management services and technology.

Doug Pyle launched Radnor Capital Management, LLC on May 1, 2012 after resigning from Columbia Management Group. Joining Mr. Pyle today is Pierce Archer who is leaving the Pennsylvania Trust Co. Mr. Pyle and Mr. Archer worked together at the original Radnor Capital Management for over a decade.

Radnor Capital Management provides investment advice to families, trusts, and high net worth clients, as well as charitable organizations, foundations and other institutional portfolios. In addition to wealth management services, both Mr. Pyle and Mr. Archer manage Separately Managed Accounts. Mr. Pyle is a portfolio manager specializing in socially responsible Mid-to-Small Cap stocks; Mr. Archer has a focus on Large Cap Value and balanced accounts.

The original Radnor Capital Management, established in 1989, was sold to U.S. Trust in 1999; U. S. Trust was subsequently acquired by the Charles Schwab Corp., who then sold it to Bank of America, who in turn sold its institutional advisory, Columbia Management, to Ameriprise Financial. The “new” Radnor Capital Management is now 100% employee-owned and financed.

“We are thrilled to be bringing back the Radnor brand and working together again as an independent team providing traditional investment counseling. Our goal is to create an investment boutique that enables us to deliver uncompromised excellence to our clients who have a long-term investment horizon,” said Doug Pyle, the founder of Radnor Capital Management. “As a result of our partnership with Dynasty and access to its robust wealth management platform, we are now well positioned to build out Radnor Capital Management by adding advisors and expanding our footprint in Pennsylvania.”

“Doug and Pierce have a strong long-term investment track record of managing portfolios for high net worth families and institutions,” said Shirl Penney, President and CEO of Dynasty. “It’s a great time to bring back Radnor Capital Management to the Radnor market and join Dynasty’s community of successful advisors and entrepreneurs.”

According to Morningstar, Inc. the Columbia Select Small Cap Fund ranked in the top quintile of all like funds for the decade that Mr. Pyle actively managed it.

Joining Mr. Pyle and Mr. Archer are a number of other original team members of Radnor Capital Management including Andrea Funk, Chief Operating Officer, Elisabeth Schwan, C.F.A., securities analyst, and Pat Barlow, account administrator.

Radnor Capital Management is located at 123 West Wayne Avenue, Wayne, Pennsylvania in the heart of Philadelphia’s Main Line suburb, Radnor Township.

Radnor Capital Management is using Dynasty’s state-of-the-art capabilities, including technology, managed investments, institutional research, trust and insurance services and credit facilities. The company will use Schwab as their custodian and will access Dynasty’s groundbreaking investment platform, which integrates the industry-leading proprietary research of Callan with Envestnet’s state-of-the-art reporting tools and technology.
About Radnor Capital Management

Radnor Capital Management, LLC is a registered investment advisor established on May 1, 2012 and headquartered in Radnor, Pennsylvania. Radnor Capital Management provides investment advice to families, trusts, and high net worth clients, as well as charitable organizations, foundations, and other institutional portfolios. For more information, please call Andrea Funk at 610-674-0401 or visit www.RadnorCM.com.
About Dynasty Financial Partners

Dynasty Financial Partners develops, sources and integrates the finest wealth management capabilities for the industry’s leading independent investment advisor teams. Dynasty offers a customized open-architecture platform of wealth management solutions and technology to help independent advisors protect and grow their clients’ wealth. Dynasty’s core principle is “objectivity without compromise,” and the firm is committed to crafting solutions that allow investment advisors to act as true fiduciaries to their clients.

September 04, 2012

Two Leading Financial Advisor Teams in Oregon – Partners Brett Davis & Steve Altman and Partners Todd Gescher & Jason Herber – Combine to Form Independent Advisory Firm: True Private Wealth Advisors

Dynasty Financial Partners announce [...]

Dynasty Financial Partners announced today that True Private Wealth Advisors becomes the most recent independent investment advisory firm to join their growing network of sophisticated advisor teams.

Based in Salem, Oregon, True Private Wealth Advisors is comprised of two experienced teams from Merrill Lynch Private Client Group – including Branch Manager Steve Altman – who will combine to form the new firm. The Davis/Altman Group and the Gescher/Herber Group will remain as two separate groups under the True Private Wealth Advisors banner.

By coming together as True Private Wealth Advisors, the group now combines to bring the best in retirement planning, college funding, business succession planning, philanthropic interests and capital preservation for its high net worth clients. The firm has a strong corporate client base consisting of entrepreneurs and many small and mid-sized companies. True Private Wealth Advisors is the 15th independent advisory firm to join Dynasty’s wealth management platform and brings expertise in both commercial banking and private families to the Dynasty Network of advisors.

As the Davis/Altman Group, Brett Davis and Steve Altman will provide wealth management services to high net worth individuals, businesses, corporations and foundations. They are distinguished by a proactive wealth management approach that has earned them recognition as one of the top teams in the region.

As The Gescher/Herber Group, Todd A. Gescher and Jason D. Herber work as a team serving a variety of different clients including corporate retirement plans, cash management accounts, non-profit organizations, family offices and individual investment accounts. Their successful practice has focused on long-term relationships based on a deep understanding of client goals and financial objectives.

Rebecca Engeln, Sr. Registered Client Associate, and Deborah Parosa, Sr. Registered Client Associate are also joining True Private Wealth Advisors from Merrill Lynch.

“Our new firm represents our unwavering commitment to our clients, and we are extremely proud to be owners of our own business. The power of our partnership as an independent firm will ensure that our clients will get uncompromised advice, outstanding service and access to leading investments,” said Steve Altman, Founding Partner of True Private Wealth Advisors. “We also believe there is tremendous potential for expanding our business, particularly in the Northwest.”

Todd Gescher, Founding Partner, True Private Wealth Advisors added, “Our team has always been steadfastly committed to serving our clients. Our research convinced us that we could offer better service with an independent business model, especially when we reviewed the resources that are now available through independent partnerships. As owners, we have made significant changes that we believe will be of tremendous benefit to our clients.”

“True Private Wealth Advisors is now well positioned to broaden their business by hiring additional advisors and expanding their footprint in the Pacific Northwest. At Dynasty, we are looking forward to partnering with this experienced team,” said Shirl Penney, President and CEO of Dynasty.

“What is unique about the launch of True Private Wealth Advisors is that we have two successful teams coming together to form one firm with greater scale and broader expertise than each team would have on their own. What they have in common is an entrepreneurial spirit and drive to build a client-focused advisory business in the Pacific Northwest. Under Steve, Brett, Todd and Jason’s leadership, True Private Wealth Advisors will be an attractive destination for additional advisors to join,” said Tim Bello, Partner and Director of Strategic Implementation at Dynasty. “We think this multi-advisor partnership model is the next wave in the breakaway advisor movement. We are getting calls from groups of advisors and branch managers who want to start their own firms while keeping their individual team structures inside the new central brand.”

True Private Wealth Advisors will leverage Dynasty’s state-of-the-art capabilities, including technology, managed investments, institutional research, trust and insurance services and credit facilities. The company will access Dynasty’s groundbreaking investment platform, which integrates the industry-leading proprietary research of Callan Associates. Fidelity Institutional Wealth Services will provide custody services and Envestnet will provide portfolio trading tools and reporting for True Private Wealth Advisors.

True Private Wealth Advisors will be based in a new location – in the historic Capitol Building in the heart of downtown Salem, Oregon at 388 State St, Suite 1000, Salem, OR, 97301.
About True Private Wealth Advisors

True Private Wealth Advisors was launched in September 2012 as an independent, SEC-registered investment advisory firm. Based in Salem, Oregon, True Private Wealth Advisors provides an array of sophisticated services to meet the unique needs of clients including individuals, families and businesses. True Private Wealth provides wealth planning, retirement and estate planning. For more information, please visit www.truepwa.com.
About Dynasty Financial Partners

Dynasty Financial Partners develops, sources and integrates the finest wealth management capabilities for the industry’s leading independent investment advisor teams. Dynasty offers a customized open-architecture platform of wealth management solutions and technology to help independent advisors protect and grow their clients’ wealth. Dynasty’s core principle is “objectivity without compromise,” and the firm is committed to crafting solutions that allow investment advisors to act as true fiduciaries to their clients.

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Austin Philbin, Director Western Region

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