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Dynasty Financial hits $22 billion of AUA after adding rare-bird Deutsche team

The $6-billion jump in 2014 for the Manhattan-based outsourcer comes four years out of the Shirl Penney garage

Tuesday, December 23, 2014 – 6:43 PM by Lisa Shidler
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Shirl Penney: The teams we're bringing out next year that we signed this year are really interesting and very large.

With the signing of a $250-million advisory firm from Deutsche Asset & Wealth Management, Dynasty Financial Partners has inked 14 deals in 2014 up from 12 last year.

The $16 billion of advisors’ assets on Dynasty’s platform at end of 2013 will have jumped 37.5% to $22 billion at year-end. The New York City firm has another $6 billion signed and ready to transition to its platform over next several months. That will bring the firm to $28 billion, a boot of 75% since the end of 2013.

When the dust settles, says Shirl Penney, founder and chief executive of Dynasty, the outsourcing and completion strategy company will serve 32 advisory firms with $28 billion in assets by the first half of 2015. See: After several quiet months, Dynasty Financial hunts a big ex-Citi head to unblock the sales process and make good it’s original promise to corner-office prospects.

“Considering we started this from scratch four years ago out of my garage and we just celebrated our four-year-anniversary and to go from zero to where we are with no acquisitions with 100% organic growth, we’re obviously very proud of where we are,” Penney says. Indeed, Dynasty may have created its own category as HighTower Advisors LLC has begun to develop its own network of advisors that it does not take an ownership stake in. See: Elliot Weissbluth pooh-poohs the idea that HighTower faces channel conflict as 'stupid and uninformed’.

Fidelity credit

The team of Fortiter Wealth Management is led by Vincent Elliott, managing director. He started his firm in Houston when he left the personal advisory arm of Deutsche Bank earlier in the fall where he’d been for 10 years. The entire four-person team departed. Elliott’s been in the industry for 15 years.

Elliott’s team focuses on just 18 ultrahigh-net-worth families who are mostly entrepreneurs. The RIA holds all of its assets at Fidelity Institutional Wealth Services. Fidelity granted up to $150,000 in credits to be used toward qualifying third-party service providers used in connection with the initial set up of the Portiter’s research, technology and software platforms; according to the SEC ADV.

A spokesperson with Deutsche declined to comment.

Elliott is joined by Carey Cooney, director of client services; Shannon McCue, director of operations; and Harris Britt, an investment analyst at Fortiter Wealth Management. Britt’s responsibilities include asset allocation studies, asset manager searches, investment performance monitoring, manager style analysis and ensuring the proper information flow between the firm and its clients.

'Indispensable member’

Penney says that Elliott was unavailable this week traveling. Elliott returned an e-mail saying he was traveling and had limited access to e-mail. If he provides any insight, we’ll add those thoughts here.

Elliott certainly emerges from the mezzanine investment bank corner of the advice business, where discretion is at a premium and information stays behind mahogany doors. We could find no photos of Elliot online and little of his history. See: How an Alex. Brown spin-off grew to be a $46 billion RIA and how a Brown Brothers breakaway fits in to its plan for accelerated growth.

But in a statement, Elliott hinted at his former firm’s product-focused shortcomings.

“Creating Fortiter Wealth Management gave me and my team the opportunity to offer our clients the highest level of service and a full suite of products free from bias or ties to any one firm. By their nature, all Wall Street firms are focused on products or their own distribution network. Fortiter allows us to focus solely on the needs of our clients. In the process, we seek to transcend the typical client/advisor relationship: we treat them just like our family, as we become an indispensable member of their family.”

More and larger

Of Dynasty’s 14 new advisory firms, eight of were inked at the second half of the year, Penney says. Some of those teams will be launching in the new year but for now Dynasty’s execs can do some Christmas shopping.

“This is the last new team we’ll be announcing this year and that’s always good,” Penney says. “This is our best year in terms of the most teams but the teams have also been much larger. The teams we’re bringing out next year that we signed this year are really interesting and very large.”

Asset movement

Elliott worked out of the Houston office of Deutsche, which was formerly named Deutsche Bank Alex. Brown. Alex. Brown and Sons was the first investment bank in the United States, founded in 1800. It was bought by Bankers Trust in 1998 and was integrated into Deutsche Bank in 1999. The name Alex. Brown is no longer part of the brand. See: How an Alex. Brown spin-off grew to be a $46 billion RIA and how a Brown Brothers breakaway fits in to its plan for accelerated growth.

It’s been said that bankers have major difficulties moving assets when they leave because banks tend to keep the clients due to loans and other business relationships. But Penney says that Elliott and team have been moving over assets at a quicker pace than he expected.

“I can tell you that he’s ahead of the schedule for the transition of the assets,” Penney says. He did not offer specifics. Fortiter manages $145 million according to its ADV that was filed Oct. 27.

Not running, a composed walk

Penney says that Elliott used Deutsche’s private wealth management platform and was considered a high-net-worth advisor.

“When you see these big private management teams leave they’re pretty successful in moving clients,” Penney says. “He had a very good relationship with Deutsche and they weren’t adversarial. It was just fundamentally about having flexibility and about owning his own firm. It was 100% where he was going. He was not running away from anything.”

Penney says that Elliott has specifically chosen to work with fewer clients.

“He wanted to have a more meaningful relationship with his clients. He’s a real wealth planner and takes a multi-generational approach. It’s amazing to see the connectivity he has with clients. He really wants flexibility on how to deliver client service. He wanted the full ability to go anywhere from execution standpoint. Most of his clients are entrepreneurs and now he’s an entrepreneur serving entrepreneurs.”

Totally righteous

Fortiter was named after the Elliott family motto, “fortiter et recte” which means strong and righteous. “Those are the ideals we aspire to,” according to the firm’s website.

“Fortiter Wealth Management serves families who know that success in life cannot be measured by the balance on a statement,” it continues.

Dynasty hiring

Given the boost in assets, Dynasty is hiring more employees. The firm hired four new staffers in December and intends to bulk up staffing in the new year. There are 34 employees currently and Dynasty and the firm intends to grow to 40 in a few month’s time.

“We’ll make key investments and are continuing to add on the service and business operations side,” Penney says.

Dynasty was originally formed by a mafia of ex-Citi Smith Barney type including Ed Swensen, chief operating officer of Dynasty, and Todd Thomson, its chairman. But the company that has aimed at attracting “corner-office types” from its old stomping grounds has found that it speaks a universal lingua franca for brokers with Wall Street dyspepsia. See: Dynasty Financial Partners launches a branding and marketing subsidiary peopled by ex-Citi execs.

“Our network is a representation of firms that run the gamut. We’ve on-boarded advisors from all four wirehouses and other places like Deutsche,” Penney says.

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