Ep 124: Insourcing Vs Outsourcing To Manage Overhead Expense Ratios While Scaling An Advisory Firm with Shirl Penney
Financial Advisor Success
Michael Kitces
4.8 • 696 Ratings
🗓️ 14 May 2019
⏱️ 112 minutes
🧾️ Download transcript
Summary
Shirl Penney is the co-founder and CEO of Dynasty Financial Partners, a back and middle office service provider for large independent RIAs. With more than $32 billion on their platform across the 47 advisory firms they support, Dynasty has focused itself purely on being a highly-scaled service provider, while allowing the firms it services to remain completely independent.
In this episode, Shirl opens up about his entrepreneurial journey, as well as how he maintained focus and perseverance during the two and a half years it took for him to be able to take his first paycheck from the business. Listen in to hear how he built his company from zero to 70 employees over a decade, the sacrifices he had to make to get to where he is today, and the key lessons he learned along the way.
For show notes and more visit: https://www.kitces.com/124
Transcript
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| 0:00.0 | Welcome to the Financial Advisor Success Podcast, where you go behind the scenes with financial planner, speaker and consultant Michael Kitsas, to hear stories of how leading financial advisors navigated the inevitable challenges that arise on the path to success and get insight from leading industry consultants about how to break through to the |
| 0:22.0 | next level in your advisory business. And now here's your host, Michael Kitsas. Welcome, everyone. |
| 0:29.1 | Welcome to the 124th episode of the Financial Advisor Success podcast. My guest today's podcast is |
| 0:35.4 | Cheryl Penny. Cheryl is the co-founder and CEO of Dynasty Financial Partners, a back and middle office service provider for large independent RAs that has more than $32 billion on their platform across 47 advisory firms that they support. |
| 0:49.6 | What's unique about Sherle, though, is the way that Dynasty has focused itself purely to be a highly scaled service provider for RAs, while allowing the firms and services to remain completely independent and without any requirement to buy in or tuck in or exchange equity for participation. |
| 1:05.6 | And the particular focus they've taken on providing all that necessary infrastructure and support for large |
| 1:11.4 | wirehouse breakaway teams and sizable RAs with hundreds of millions or more in assets |
| 1:16.3 | under management. |
| 1:17.5 | In this episode, we talk in depth about the dynasty model. |
| 1:21.2 | The four key service lines it offers, including transition support and consulting for |
| 1:25.6 | breakaway brokers, Its broad investment platform, |
| 1:28.5 | including an in-house tamp as well as a wide range of third-party SMA, UMA, and alternative |
| 1:33.1 | investment solutions. It's core business of mid-office support services for advisory firms, |
| 1:39.1 | covering everything from compliance to marketing to technology. And its's new dynasty capital strategies line that does direct |
| 1:46.6 | lending to advisory firms for everything from financing acquisitions, succession plan financing, |
| 1:51.8 | to offering what they call revenue anticipation notes to allow advisory firm owners to partially |
| 1:57.5 | monetize the equity of their firms to generate additional capital to |
| 2:01.0 | reinvest for more growth and acquisitions, and still giving the firms a chance to buy their |
| 2:06.1 | revenue back if they decide they want to in the future. We also talk about the cost of outsourcing |
| 2:11.3 | an advisory firm's core operations and middle office, the dynasty model of charging an average |
| 2:15.8 | of about 15% of revenue to provide its |
| 2:18.3 | back-in-middle office services, the typical gross margins that firms that leverage |
... |
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