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Shirl Penney, CEO, Dynasty Financial Partners

Industry Spotlight > RIAs

Shirl Penney Eyes Independence Day for Dynasty’s $100B Milestone

By Ryan W. Neal

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Shirl Penney hopes next Fourth of July will mark a significant milestone in the history of independent financial advisors.

That’s the date the Dynasty Financial Partners founder and CEO has penciled as a conservative target for reaching $100 billion in assets.

There are currently 52 registered investment advisors on Dynasty’s network, and more than $85 billion sitting on Dynasty’s technology, Penney said in a virtual meeting with reporters during the firm’s annual Investor Forum. More than half of those assets, $45 billion, are also on Dynasty’s outsourced investment platform. 

Internally, the company is already planning for its $100 billion party. Not even recent market turbulence has slowed the movement of advisors breaking away from wirehouses or leaving independent broker-dealers in favor of the RIA space, he said. 

“We probably have the best pipeline that we’ve ever had with advisors continuing to come,” Penney said. “I would not trade our position in the high-end RIA ecosystem with anyone, and shame on us if we don’t take full advantage of it.” 

While the number of advisors coming to Dynasty has remained steady, what has changed is the size of teams that are moving, Penney added. When Dynasty launched 14 years ago, a large breakaway would have been managing $250 million. In the last few years, Dynasty has helped dozens of multibillion-dollar teams go independent. 

“Usually in any new movement … you have kind of the rugged individualist, the pioneers if you will, early on, but once that path starts to get worn, the next group that comes tends to be a larger group,” Penney said. “Now that the path and road to independence is so well-traveled, I think you’re going to see larger, more sophisticated teams that have larger, more sophisticated end clients continue to move to independence quickly.” 

This “rapid professionalism” of the RIA industry is why Dynasty has invested in growing its team. In addition to hiring Andrew Marsh in September as the company’s first vice chairman and Ron Insana in July as chief market strategist, Dynasty has invested “north of seven figures” in executive education and formed a partnership with the MIT business school, Penney said. 

Market conditions have undoubtedly affected M&A activity in the space. Credit is much tighter in the current interest rate environment and there has been a pullback in terms of valuation, Penney said. However, when market dips lead to a cut in wirehouse advisors’ compensation, it’s only natural for them to explore whether going independent can improve the economics of their practice. 

The number of deals will accelerate in the next 12 to 24 months as aging advisors realize they can’t keep waiting for a “perfect time” to strike a deal, Penney said. 

And once these advisors go independent, they don’t look back. 

“There are no break-back brokers,” Penney added. “There has never been a $500 million-plus team that has ever gone independent that has gone back. It’s a one-way street.” 

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