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May 08, 2017 at 10:51 AM
Dynasty Financial Partners is moving to give the 42 RIA firms it works with more financial options.
The group, which works with advisors who manage more than $20 billion in client assets, has launched Dynasty Capital Strategies — which, in addition to offering business loans, will now buy a revenue interest of 5-10% of a partner firms looking to raise capital.
The move aims to give RIAs more ways to access liquidity for their growth strategies, such as starting up a new business, succession planning, asset diversification or fund acquisitions. It also lets them buy back the revenue shares after three or more years.
“This is another [option] for our partners, so they have liquidity and can get it as an option in the [Dynasty] family,” said Dynasty President and CEO Shirl Penney, in an interview.
For an RIA that produces fees and commissions of $5 million a year, for instance, Dynasty would be entitled to $250,000 to $500,000. “Say the group grows, we get better returns as they grow; they do no pay interest can buy back the interest after three years,” Penney explained.
The revenue producing notes, or RPNs, that Dynasty is introducing are a response to complaints made by lots of RIAs, according to the executive.
