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Dynasty Financial Partners Launches Investment Bank

Schwab-backed Dynasty is now offering M&A advice and financial support to firms outside its network.

Dynasty Financial Partners announced the launch of Dynasty Investment Bank on Monday.

Led by Harris Baltch, Dynasty IB will leverage the partnership platform’s experience in mergers and acquisitions, alongside a handful of capital strategies, to provide buy- and sell-side advice, practice management expertise, and funding for wealth management firms and related entities inside and outside the Dynasty network.

“Given the amount of fragmentation and some of the natural headwinds going on in our industry with respect to aging advisors and lots of different types of capital sources coming in, there really is a scarcity of good advice,” said Baltch.

Noting the Dynasty network supports close to $80 billion in assets and has helped partner firms complete 30 deals since 2018, he said, “It just made sense for us to leverage our capability externally to help and serve other firms that need strategic advice.”

Baltch also pointed out that offering those services outside Dynasty’s existing network is likely to expose partner firms to more opportunities. Another benefit, he added, is the ability of investment banks to closely monitor M&A transactions.

“Our network firms are going to get access and exposure—on a no-name basis, of course—to better information flow,” he said. “A lot of [transaction] information isn't disclosed publicly. Our clients are now going to benefit from better up-to-date information on things like how to enhance deal structures as they think about M&A, and when they're ready to have some type of liquidity event, they’ll be able to leverage our expertise to either take an equity investment from a third-party firm or potentially from us.”

In addition to offering advice around deal structure for buyers and sellers, Dynasty IB will help with valuation, succession planning, recapitalization, transition and integration. The bank also offers bespoke strategic planning and will source attractive deals for clients.

On the capital side, Dynasty IB offers three options: a senior debt term loan product available to external clients and partner firms, as well as minority equity opportunities and a revenue participation option available only to Dynasty partners.

“We'll always be a services-led, technology-led organization first, with capital as an accommodation to our clients,” said Baltch. “Should they choose, after speaking with us, that they want to take some chips off the table and join the Dynasty network, us coming in and buying a small percentage of revenues or making a minority equity investment is certainly not off the table.”

Minority investments from Schwab and Abry Capital, announced late last year, will help to support the new venture, but Baltch said Dynasty has historically funded capital services with balance sheet cash flow.

“With our deep expertise and years of experience working with hundreds of leading advisors, we are well-positioned to offer RIAs a wide range of investment banking capabilities in this ever-complicated market,” Dynasty CEO Shirl Penney said in a statement.

The nine-person investment banking team is drawn from private equity and bulge-bracket firms, as well as Dynasty’s own M&A team, and represents more than 100 years of industry experience, including more than 50 in investment banking.

“We have a deep bench of relationships across the buyer and investor community,” said Baltch. “And now we can leverage that as we take on mandates outside of the Dynasty network to help achieve the strategic objectives of some of the RIAs that are out there.”

There are currently 50 partner firms and more than 300 advisors in the Dynasty network, representing some $75 billion in assets.

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