Dynasty Financial Teams With Private Equity To Incubate CPA Wealth Management

Wednesday, April 11, 2012 08:10
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Dynasty Financial Teams With Private Equity To Incubate CPA Wealth Management

Tags: CPAs

Consolidation and scale are magic words in the advisory business these days. Wealth management outsourcing firm Dynasty Financial Partners is going an innovative route to scale up fast.

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Dynasty saw an opening in selling its investment platform to accounting firms. It's an attractive niche, given the fragmentation in that channel and the deep relationships CPAs have with their wealthy clients.

 

The accountants want to deepen their businesses by adding traditional investment-oriented services. 

 

But instead of courting each accountant separately, Dynasty simply went straight to Method Holdings, a private equity firm that specializes in pumping cash into CPA firms looking to make the transition to wealth management.

 

Method buys a stake in the accounting firm's wealth management business and supplies them with Dynasty know-how and support. Dynasty gets the ability to build a significant captive customer base faster. And the accountants get access to a wealth management platform designed for breakaway RIAs.

 

So far, Method has bought into one CPA firm, Atlanta-based HA&W Wealth Management, and has its eyes on others. 

 

At this point we all know that private equity funds are very interested in building portfolios of independent financial service firms: broker-dealers, accountants, RIAs. 

 

Going straight to the private equity guys instead of negotiating with the portfolio firms may just be a stroke of genius.

 

We'll have to see. Right now, Dynasty is still in the early stages, with 10 firms on its platform after a little over a year of operation.

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