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Atlanta RIA With $3 Billion Takes PPP Loan for COVID-19 Relief

Lakeview Capital Partners, which manages $3.3 billion in client assets, received $581,000 and intends to apply for forgiveness next month, according to a newly updated Form ADV.

Lakeview Capital Partners, an Atlanta-based registered investment advisor with about $3.3 billion in assets under management, was the latest firm to disclose it received a Paycheck Protection Program loan from the federal government, according to an updated Form ADV submitted to the Securities and Exchange Commission yesterday.

The firm received the $581,000 loan on April 15, according to the disclosure, with Lakeview asserting that it will be utilizing the funds “in accordance with the required guidelines.” Additionally, the firm wrote that it intends to apply for loan forgiveness on June 10.

The firm offers clients financial planning, income tax strategies, as well as retirement and estate planning, among other services, and has offices in Charlotte and Brevard, N.C., as well as in Jacksonville, Fla., and LaGrange, Ga., in addition to its Atlanta home office.

The PPP program was a part of the CARES Act, which was passed in late March to help businesses maintain employee head count during the spread of COVID-19. The PPP loans, which are eligible to companies with fewer than 500 employees, can be used for payroll, as well as certain other expenses, including mortgage interest, rent and utilities. The loan can be forgiven if the company taking the loan uses 75% of it toward payroll in the first eight weeks after it’s been dispersed, provided employees don’t suffer a 25% drop in pay and if the company’s employee head count is the same as of June 30.

Lakeview did not respond to a request for comment by press time.

In addition to shepherding clients through the PPP loan application process, some advisory firms applied for loans for their own businesses, including larger firms such as Sanctuary Wealth Group, Thoroughbred Financial Services, Crestone Asset Management and IPG Investment Advisors

The spate of disclosures has spurred questions over whether financial services firms should be pursuing PPP loans in the first place. Scott Salaske, a CEO at the small advisory firm Firstmetric, has been an outspoken critic of large RIA firms taking the loans.

“At the end of the day, these firms have to be in the position of dealing with bear markets,” he said. ”At the end of the day, they know they don’t need the money. They know the loan was intended for small businesses like restaurants where they need to keep employees employed. It was not meant to be an indirect windfall for RIAs.”

But others, including Jeff Levine, the director of advanced planning at Buckingham Wealth Partners, cautioned that RIAs could justify taking a loan as it would help reduce the possibility of layoffs. 

"It’s not a business continuity protection program. It's designed to keep payroll and keep payrolls protected,” he said. “I'm not going to get upset at the firm that has a 25% drop in revenue, sees its profit evaporate, and says we can cut staff by 5%, or cut payroll by 8%. That's a reasonable business decision to make, but if you have this program, maybe you don't have to make those decisions."

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