Skip navigation
money-blurred-hands.jpg Steven Puetzer/The Images Bank/Getty Images

Tennessee RIA With $2 Billion in AUM Gets PPP Loan

Thoroughbred Financial Services said the loan would be used to support payroll and other expenses allowed under the program's guidelines, according to the firm's updated Form ADV.

A Tennessee-based registered investment advisor with about $2 billion in assets under management received a Paycheck Protection Program loan totaling $552,600 in April, according to the firm’s newly updated Form ADV submitted to the SEC on May 20.

Thoroughbred Financial Services (TFS) joins a growing list of RIA firms that applied for the loans, which originated in the CARES Act passed in late March. The loans were intended to help businesses maintain their employee payroll and head count during the economic ramifications of the COVID-19 crisis. 

“The firm determined, at the time of its application for the loan, that the results of COVID-19, including the many “shelter in place” orders, and the severe volatility in the financial markets, would result in a marked decrease in revenue,” the updated form read. “Without the PPP loan of $552,600 and with the prospect of ongoing market declines TFS would have to consider salary reductions and ultimately staff layoffs.”

The loans are forgivable provided businesses use at least 75% of the loans for employee payroll and maintain the same employee head count through the end of June as they did at the start of the crisis. In their Form ADV, Thoroughbred stated that it had not suffered “an interruption of service” but would further update its form if there were additional changes.

Thoroughbred did not return a request for comment on the loan.

In recent days, numerous RIAs have submitted an updated Form ADV to the SEC, after the commission offered guidance indicating that firms may have to disclose whether they received a PPP loan. Applicants to the program encountered numerous hurdles along the way, and hundreds of billions of dollars have been allocated for the program thus far.

Some have criticized RIAs with significant AUM for applying for PPP loans, arguing they’re meant for small businesses in dire straits and with the market almost even year to date and even positive from one year prior (even with the massive volatility), RIA firms should not be in a particularly precarious position. In a previous interview with, Trailhead Partners co-founder Morgan Ranstrom questioned what would drive an RIA firm to consider a PPP loan.

“If you're a wealth advisor serving wealthy clients, you should not need a bailout to survive a bear market," he said. “If you're a wealth management firm, yes, we have to work from home, but otherwise this is a normal environment. Yes, the market's fluctuating, but shouldn't that be built into your business model?"

Others, including Jeff Levine, the director of advanced planning at Buckingham Wealth Partners, said that a case could be made for RIA firms taking a PPP loan.

"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."

TAGS: Industry
Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.