The rise of $1.0 billion-plus wealth advisory firms, with the added complexities and demands they bring, has prompted Dynasty to build a new group focused entirely on this segment.

Dynasty Financial Partners is creating a group to focus entirely on partner firms with more than $1.0 billion of client assets, highlighting how the billion-plus segment within the registered investment advisor (RIA) space is becoming an increasingly distinct market.

The group is called Dynasty Enterprise Group, led by Ed Friedman, director, and Gordon Ross, senior vice president, and will “cater to the largest and most complex independent advisory firms on the Dynasty Platform”, the firm said in a statement yesterday. 

As a result of the creation of the new group, Dynasty has reorganized: Based in New York, Jason Pinkham is now director of Dynasty’s Eastern division and transition services. Based in San Francisco, Austin Philbin is now director of Dynasty’s Western and Central division. Both Pinkham and Philbin work with new and existing Dynasty Network firms to grow and professionalize their practices. Pinkham, Philbin and Friedman report to Dynasty co-founder and COO, Ed Swenson.

The complex demands of larger RIAs create a set of needs that have prompted the creation of the new group, the firm said. 

“In working with the industry’s elite independent advisory firms, we at Dynasty have been given a glimpse into how the DNA of an RIA evolves as it approaches and surpasses the $1 billion AUM threshold.  Firms of this size are presented with unique opportunities and complexities that require a specified solution set – one that DEG will afford them,” Dynasty’s chief operating officer, Ed Swenson, said. 

Such $1.0 billion-plus registered investment advisors are becoming increasingly significant in the wealth space. A total of 687 retail-focused advisory firms in the US have reached the $1.0 billion mark for assets under management, but in total make up a modest (3.8 per cent) share of all such businesses in the sector, according to Cerulli Associates in a report last November. M&A activity is helping to drive this trend, the report said. Another report, by M&A consultancy ECHELON, said the first quarter of this year saw a total of 46 transactions, and the company predicts that the US market will clock up more than 185 deals in 2018.

"The RIA industry in the US is evolving.  Many large RIAs that launched 10-20 years ago used to be known for having the top technology and processes available in the marketplace. However, we have found that many of these firms failed to evolve, and their infrastructure is now outdated - leaving them disadvantaged to newer, more nimble RIAs that are adopting new-age technologies and practices," Friedman said. 

"We are seeing significant demand from these large, complex RIAs, seeking assistance in order to drive change, increased profitability and modernization within their businesses. DEG will give these firms metrics by which to measure performance, help them optimize their operational efficiencies and provide insights and resources to maximize their growth," he said.

In July, DEG will launch the first in a series of national best practices workshops, entitled, “Optimizing the Billion Dollar Firm.”