Dynasty Financial Partners Creates Referral Program to Introduce Wealthy Investors to Its RIAs

During a 90-day beta test, the program connected advisors to clients with an aggregate of $200 million in assets.

Illustration by RIA Intel (Bigstock photo)

Illustration by RIA Intel

(Bigstock photo)

Dynasty Financial Partners has created a referral program to introduce wealthy investors to its network of RIAs, an effort to juice the organic growth at the wealth management firms, the company said Wednesday.

The back- and middle-office service provider to RIAs has been testing the program, called Dynasty Connect, with four of its partner firms for the past 90 days. During that time, it introduced advisors to clients with an aggregate of $200 million in assets, according to the company. More than 50 RIAs in Dynasty’s network — which includes more than 300 financial advisors managing about $60 billion — could participate in the program as soon as early next year, a spokesperson for Dynasty told RIA Intel.

The referral program has been over a year in the making and comes at a time when more investors are seeking independent financial advisors, Sally Cates, a spokesperson for Dynasty said.

All involved stand to benefit. Investors who need financial advice, or want a new advisor, will have another way to find one. The RIAs, which pay a fee to be part of its network, get another boost to their organic growth. And the larger Dynasty’s RIAs get, the more money Dynasty makes (it charges advisors a fee based on the assets they manage).

“In today’s fragmented market, it can be a challenge for high-net-worth investors who want to work with an independent financial advisor to find one that fits their needs and to connect with them. Investors often rely on word-of-mouth connections and may not be aware of the specialties of certain independent advisors that may align with their situation,” Joe D’Agostino, Director of Investment Platform and Product Strategy at Dynasty, said in a statement.

During the beta phase, the company is primarily targeting potential investors through LinkedIn and Instagram marketing campaigns, Cates said. Dynasty is also hoping to leverage its network, resource partners, brand, and athletic partnerships, and events to get investors into the Dynasty Connect referral funnel. It is also working with asset management firms and “centers of influence,” according to Cates.

Ads on social media direct investors to an online Dynasty questionnaire where they share information about themselves, including geography, financial situation, specific needs, and desired advisor specialties.

Dynasty’s home office then contacts and interviews the prospective clients to get a better understanding of why they are interested in hiring a financial advisor. “We feel this hands-on approach helps make sure the best match can occur as clients’ individual situations and desires cannot always be fully captured in a digital form,” Cates said in an email. Other referral programs and services do something similar.

Prospective clients who want to connect with an advisor, or several advisors, are then introduced to them by Dynasty. Cates said those introductions are based on Dynasty’s knowledge of its network and what the client needs. That might include the sale of a business, help navigating major life events, and or expertise working with professional athletes, retiring professionals, institutions, and others. The prospective client’s preferences on geography are also a factor.

“Over time, as the program matures and scales, we will leverage more technology overlay to process referrals, but our referral desk will remain heavily involved in the matching process for the benefit of both the end client and advisor,” Cates said.

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In Wednesday’s statement, Shirl Penney, Dynasty’s president and CEO, said helping investors understand the “Triangulation of Advice,” a term Dynasty trademarked in 2015, has always been part of his vision for the company.

Shirl Penney described the Triangulation of Advice (TOA) as “receiving your financial advice separate from safe custody of assets and separate again from where investment products are manufactured and sold. Beyond education, we will assist investors in getting connected to independent advisors who practice the triangulated advisory model. Finally, Dynasty’s technology platform ties the experience together for both the independent advisor and the end client.”

Dynasty plans to charge advisors “slightly less” than 25 basis points on the assets a referred client brings to an RIA to manage, less than what custodian referral programs typically charge, the company told RIA Intel.

“It will start with retail clients at 20 basis points on the referral but, because we play oftentimes in the ultra-high-net-worth space, it will tier down to numbers that are much less than that, ultimately below 10 basis points for more ultra-high-net-worth clients that are reaching out to us to get connected to the advisors that we support,” Penney said.

The chief executive expects “high levels” of participation by advisors who are part of the network.

In April, Schwab Advisor Services announced it was combining its own referral program with an existing one that came with TD Ameritrade’s RIA custody business. Out of 298 RIAs that participated in the old referral programs, 175, or a little more than half of the firms, were invited to participate in the new one called the Schwab Advisor Network.

Holly Deaton (@HollyLDeaton) is a staff writer at RIA Intel and based in New York City.

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Holly Deaton (@HollyLDeaton) is a staff writer at RIA Intel and based in New York City.
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