By luring Tom Petrone out of Greenwich hibernation, the NYC platform company can tell would-be breakaways that their offering is strictly hard-bodied

September 25, 2013 — 4:45 PM UTC by Brooke Southall


When that stockbroker comes calling from Merrill Lynch, UBS, Morgan Stanley or Goldman Sachs, there is an implicit promise that all that institutional-deal-making power will be applied to your account by very smart men in Armani suits back in New York.

Most of us never have such brainpower and fine wool applied to our wealth. But there are clients who — thanks to those “top men” realize that lofty promise of service.

Now Dynasty Financial Partners LLC has hired a top man. Tom Petrone is expected to erase any fears from defecting corner-office brokers at wirehouses that joining an RIA is like leaving your guns at home..

A Citigroup lifer, Petrone, 58, most recently served as head of capital markets for Citigroup Private Bank NA and retired two years ago. The group he oversaw in his previous job at Citi had about $500 million of annual revenues, according to Dynasty chief executive Shirl Penney.

“We thought Tom was right early on, and we had to convince him out of retirement,” he adds.

Mission point man

The value proposition of Dynasty from the start was to make RIAs fully competitive with stockbrokers, not only for plain-vanilla fiduciary investing i.e. stock, bonds, SMAs and mutual funds for high-net-worth and ultrahigh-net-worth clients. It has also made strides with hedge funds and private equity. See: Dynasty Financial hires an expert to help it build an alternative-investments inventory.

That wasn’t all.

The New York-based platform — and platform of third-party platforms such as Envestnet Inc. and Callan Associates Inc. — also held the implicit promise that the one-off requests for transactions involving derivatives, structured products, the designing of hedging and monetization strategies on restricted securities, and capital raises would be handled as like the big boys. See: Attack of the killer app: Dynasty targets the corner-office broker by combining Envestnet and Callan.

Todd Thomson, chairman of Dynasty, with advised assets of $16 billion at the 18 firms in its network, says in the past his company has made good on the promise — but not as efficiently or systematically as he would like.

“We found a way to get it done, but we spent the last nine months looking for a significant person [to concentrate on it],” he says.

Penney says there are indeed a number of Dynasty prospects in the wind waiting for this final piece of the puzzle to fall into place. Dynasty announced a deal with Further Lane in July but before that it hadn’t announced one since April 2. It has grown from 15 firms and $13 billion of advised assets with its firms since last December, reasonably fast growth but a deceleration for this potent and ambitious firm and its goal of bringing on 150 firms in a few years.

High-end capable

Petrone will also work to hook up Dynasty RIAs with smaller investment banks that have no in-house distribution arm for initial public offerings, secondary offerings and private placements. This is model that is being eyed in San Francisco by the startup of Robertson Stephens. See: With big LPL backing, the Robertson Stephens brand revives to roll up advisors to the suddenly wealthy.

! Thomson: We haven’t been quiet internally.)

Penney adds that he knows firsthand from his days at Citigroup Private Bank that Petrone’s skills go beyond those of a garden-variety deal hound and extend to interpersonal skills.

“I worked closely with him and brought him into hundreds of high-end client meetings. He’s excellent with clients and with serving advisors.

Quiet activity

The Petrone hire comes after a number of months of relative radio silence from Dynasty on the PR front, but the firm’s executives assure that activity is brisk.

“We haven’t been quiet internally,” Thomson says.

Penney adds that he has declined to publicize deals because the clients preferred to keep the transactions private.

“We added teams; we just haven’t issued press releases. .. and we have a strong pipeline of opportunities and of advisors who have signed but have not transitioned yet.”

Correction: Tom Petrone was co-head of derivatives for North America for Citi prior to running capital markets for Citi Private Bank. The Derivatives business had revenuess north of 500 million. A prior version of the article said that the capital markets business had the $500 million of revenues.

Mentioned in this article:

Dynasty Financial Partners
Consulting Firm, Specialized Breakaway Service, RIA Set-up Firm
Top Executive: Shirl Penney

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