Dallas RIA with $550 million jumps to $1.1 billion of AUM by slicing off $550 million of PBIG bacon in form of Merrill Lynch breakaways
With Pershing and Dynasty Financial as anchors, Syntal breaks down Private Banking Investment Group walls at Merrill Lynch on the strength of Texas ties
Brooke's Note: This summer when I went to Maine, I was the first family member to plunge into the cold Atlantic Ocean. It was a warm day but I also wanted to encourage the rest of our clan that once you immersed yourself in the liquid ice that it was all perfectly fine. My first efforts got glances from beach chair sitters. Only after I'd been in there for 10 minutes did I have anyone else make the plunge. The point is that you need somebody you know and trust to test a new environment before joining. The fact that other random beach goers are plunging in has no impact. In hot Texas, this dynamic played out intensively over the last one year, five years and 11 years depending on how you measure it. The net result is a hybrid between a big merger of equals and a tuck-in that shows that RIAs don't need to be certified serial buyers or a private equity-backed roll-up to extract big corner office teams from Merrill Lynch.
In what may be a glimpse of the RIA future, a $550 million RIA in a small West Texas town just "tucked-in" an elite Merrill Lynch team of equal size in big ol' Dallas.
Syntal Capital Partners of Midland, Texas nabbed the four-person team out of Merrill's elite Private Banking and Investment Group unit headed by Ben Gordon. Syntal is headed by Dane Crunk, managing director and co-founder, who broke away from PBIG himself in 2012.
The silent partners in the deal, which will create a $1.1 billion RIA if all goes right, are Dynasty Financial Partners and Pershing, which helped shepherd the deal along.
Crunk-ing it out
Crunk quietly cultivated his relationship his relationship with Gordon for more than a decade.
“Obviously, there’s still communication that goes on with your peers from wherever you’re leaving,” he explained. “Ben and I have had ongoing conversations since we formed Syntal in May of 2012.”
Ex parte chats aside, Dynasty CEO Shirl Penney says this deal marks a new era in the RIA breakaway movement when a big wirehouse breakaway -- with plenty of resources to form its own firm -- joins an existing RIA of comparable size.
"They don't have private equity behind them," he says. "This is a positive sign for the RIA business."
Crunk says the presence of Dynasty took away any sense of rolling the dice in attempting this somewhat ambitious deal.
No gamble ramble
“I think for anybody like us who is coming out of a wire house where this is their livelihood, it’s not something that you gamble with or experiment with,” he said about his choice to use Dynasty.
But it was Syntal's own ability to show that a PBIG team could make it big as an RIA that got Gordon's attention.
"We have watched Dane and Chad build out Syntal since their launch in 2012 and have been very impressed with their success as a leading Texas-based independent advisory firm in the energy space. We look forward to working together and leveraging the capabilities available in the independent space.”
What makes the impression is the double-barreled effect of being able to serve clients better -- and get paid more, according to Joel Bruckenstein, technology expert and creator of the T3 conferences.
“A lot of these advisors who are on these more closed platforms, or these proprietary platforms, are trying to realign with their clients. It’s that simple,” he said.
Syntal uses PCR for performance reporting and Tamarac for re-balancing software. With Addepar muscling in, original UHNW software force PCR hires new CEO, triples engineering staff, kills off asset-based pricing and seeks more RIAs
Syntal originally launched with Salesforce and the AppCrown overlay before Dynasty switched to InvestCloud. InvestCloud, a start-from-scratch Envestnet emulator and Jamie Dimon darling, gets cozier with Apex to better reach RIAs
On the other side of the divide, the wirehouses are continuing to serve clients as they have done in the past, Bruckenstein says. Things are coming to a head as costs begin to significantly outweigh the benefits.
“If you have a higher cost structure,” he says of the wirehouses, “you have two choices: you can either raise fees – which they can’t do right now – or you can cut your less profitable advisors or not highly incentivize your less profitable advisors to stay. If you have people at the low end of that food chain, it may make more sense for them to leave.”
Penney boiled it down.
“The advisors make more money as RIAs. They tend to make a lot more money on average actually.”
The new team includes Laura Blair, senior vice president of client operations; and Collin Hart, vice president of investment strategy and research– all joining from Merrill Lynch. Risa Kiser, the newest team member is joining as chief of staff for the Dallas market.
Executive shake-up and staff hiring binge change Dynasty Financial Partners' talent mix, with Todd Thomson, Scott Welch, Ed Friedman and 12 women as headliners
The St. Petersburg-based producer of 'synthetic RIA scale' will continue to aggressively hire and adjust its talent ranks as it readies for next growth push.
September 24, 2019 – 2:02 AM
Dynasty Financial hires 'real deal' TD Ameritrade RIA sales talent who left after Schwab deal; he'll again mine for RIAs on Florida's Gold Coast--first big news since IPO disclosed
The St. Peterburg, Fla., technology outsourcer made its 10th Florida hire since start of year but first one on the state's Southeastern Coast
February 17, 2022 – 2:50 AM
Envestnet nabs Dani Fava to cross-pollinate semi-autonomous units and reap 'financial wellness' as the end product
The Chicago outsourcer has a massive, partially disconnected arsenal of products that CEO Bill Crager is rationalizing into 'wellness' with yet another new unit.