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Shirl Penney Image via Dynasty Financial partners
Dynasty CEO Shirl Penney

Dynasty Sets $100B Growth Goal

CEO Shirl Penney expects his independent advisor services platform to reach its goal by Independence Day of next year, and he still has plans to take the company public.

Dynasty Financial Partners is on track to reach its goal of $100 billion in assets by July 2024, as the growing support platform for independent registered investment advisors continues to expand services and onboard larger firms, according to founder and CEO Shirl Penney. 

The firm currently has about $80 billion in assets across more than 50 partner firms.

“I'll say conservatively by Independence Day—ironically—of 2024,” he said. “I may be disappointed in the team if we don't get there before then, but I'll say by then. We have a great pipeline.”

In a press briefing Tuesday with new Chief Market Strategist Ron Insana during Dynasty’s annual Investor Forum, Penney said one of the notable trends he has seen is the growing size of the teams moving into the RIA channel.

“We started the business almost 14 years ago. A very, very large breakaway advisor back then would've been $250 million,” he said. “We've launched dozens at this point, $500 million to multi-billion-dollar breakaways. I would venture to say that in the last five years we've probably had more billion-dollar breakaways than the rest of the industry combined.

“Now that the path in the 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 because they realize higher income for them, enterprise value of their business, the ability to have more customization and more freedom and flexibility in how they service clients, more modern technology.”

While Dynasty might buy up to as much as a quarter of the equity in a partner firm, it is intentional about leaving ownership and decision-making in the hands of firm principals—and all in-house M&A is in support of their inorganic growth goals. In addition to providing practice management, technology and M&A support to around 50 partner firms, Dynasty launched an investment bank this year to serve advisors and firms outside of its ecosystem that are interested in doing M&A.

The firm has also been investing in talent and technology to bolster outsourced investment services.

“We're seeing an acceleration of advisors coming to us now and saying, ‘I don't want to just outsource all of my technology. I want to outsource my investments,’” said Penney. “Outsourcing to grow is something we’ve talked about, not just on the tech but on the investments because markets are choppy, the world is complicated. Outsource it to a great group of partners, free up your time to be with your clients and to go get new ones.”

He also noted that Dynasty has spent “north of seven figures” on educational resources for burgeoning business leaders through a partnership with MIT’s Sloan Business School and naming Andrew Marsh, who grew a Canadian firm to $40 billion in assets across 75 teams, as vice chairman, mentor and coach.

“In this rapid professionalization in the RIA space where you have advisors becoming substantial CEOs of large enterprise business, many of those on our platform are worth hundreds of millions of dollars,” he said. “These are substantial businesses.”

Ultimately, Penney said the goal is to create brand recognition on a national scale.

“Like Intel inside, where the device is made great in part because of one of the ingredients,” he said. “We want to be that sticker that's powering some of the large-scale national firms. If we can do that and Dynasty becomes this robust platform brand, I think we can raise awareness for the benefit of independent advice for more people to look for advice that way. And the result of that should be hundreds of billions for Dynasty.

“Somebody is going to build a $10, $15, $20 billion business, I believe, even over the next 10 years in our space,” Penney said. “I have complete conviction that someone's going to do that. The question is, is it going to be us?”

It may take a couple of years, but Penney expects his firm to eventually go public. Dynasty filed for an IPO last year, but abandoned its plans amid a bad market for public offerings. Instead, it raised fresh capital from Charles Schwab and private equity firm Abry Partners. 

“When maybe things have normalized a bit in the market, where it’s less choppy,” he said of an eventual IPO. “I imagine we’ll probably look ultimately at the public markets because I believe, as the founder of the business, it's probably the right place for the business to allow us to live up to the name Dynasty, which is sustained excellence, multi-generational built to last, not built to flip. And, I think a lot of our advisors like the transparency of it around the alignment to see the strength of the business and the balance sheet.”

Penney also cited the strength of Dynasty’s “incredible fortress” balance sheet, which shows an excess of capital and zero debt.

“Relative to a lot of other players that have high levels of leverage with interest rates that are probably about to reset on them higher, it puts us in a very strong position to support our advisors on growth,” he said.   

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