Dynasty Financial Partners, a service provider to more than 50 independent RIAs, and MarketCounsel, a regulatory consultancy, have both invested in the compliance software company SmartRIA. Dynasty’s network of wealth managers stands to gain from a partnership between the three firms.
On Tuesday, during MarketCounsel’s annual conference, an invite-only event for RIAs in Miami, the two investors revealed that they owned minority stakes in SmartRIA. Dynasty and MarketCounsel were the only investors that participated in SmartRIA’s round of capital raising. The size of the investments and terms of the deals were not disclosed.
MarketCounsel president and CEO Brian Hamburger will join SmartRIA's board of directors.
The deals closed three months ago, and Dynasty has already begun onboarding RIAs in its network to the SmartRIA platform, the service provider told RIA Intel. MarketCounsel will also leverage the platform to give the RIAs tailored compliance management programs.
“When we were looking for cutting-edge software to make compliance considerably easier, more operationally efficient, and more collaborative for advisory organizations, we found that SmartRIA was the best choice,” said Edward Swenson, co-founder and chief operating officer at Dynasty Financial Partners. “SmartRIA offers a user-friendly interface, automated workflows, and a value-adding consultancy feature to transform compliance from drudgery into a driver for robust growth — all within a centralized platform.”
SmartRIA also monitors trading, performs operations documentation, alerts users of compliance violations, and helps RIAs determine which vendors and employees have access to certain information.
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“As the regulatory and risk landscape continues to evolve, RIAs find themselves allocating outsized internal resources to protect the firm and maintain their regulatory compliance program,” Hamburger said. “We are excited that we’ve been able to translate our bespoke compliance program and its custom monitoring algorithms to SmartRIA’s platform, and [we] believe that, together, we can give our RIA member firms peace of mind without having to hire more team members or utilize multiple, disparate technology systems. I am excited to work with SmartRIA's leadership team on executing [its] strategic vision and enabling more advisors to benefit from its technology.”
The investment and partnership with MarketCounsel and SmartRIA are two of Dynasty’s latest moves to improve the products and services it offers to a network of RIAs managing an aggregate of $60 billion in assets. Those firms pay Dynasty a fee that is a percentage of the assets they manage.
In November, Dynasty announced that it had created a referral program to introduce wealthy investors to its RIAs, an effort to juice the organic growth at the wealth management firms. The previous month, it partnered with the MIT Sloan School of Management to create a three-day “Advisor to CEO Program.”
Earlier this year, Dynasty said it planned to begin using its own balance sheet to purchase minority stakes in members of its network, rounding out the capital solutions it already offers, including traditional debt financing and revenue participation notes.
Shirl Penney, CEO at Dynasty, said Tuesday his company expects to continue investing in its services for the benefit of its RIAs and their clients. That resonated with SmartRIA’s chief executive Mac Bartine.
“Dynasty and MarketCounsel share our commitment to providing independent RIAs with the tools they need to help their businesses adapt and grow, and we are grateful for their support and guidance,” Bartine said.
Michael Thrasher (@Mike_Thrasher) is a reporter at RIA Intel based in New York City.