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Dynasty Gives Breakaway Advisors Option to Take on Forgivable Loans

By Rita Raagas De Ramos June 11, 2019

Dynasty Financial Partners has launched the Dynasty Freedom Note, which it hails as the industry’s first forgivable note program for advisors seeking independence.

The program will give qualified advisors who join the Dynasty network the flexibility to receive a forgivable loan based on a percentage of their revenue that will be repaid with a portion of their RIA firm’s revenue, according to the company.

Once repaid, the advisors will own all equity in their RIA and continue to have a service relationship with Dynasty for ongoing support, the company adds.

Shirl Penney, president and CEO of Dynasty, says the Dynasty Freedom Note is an example of an innovation from the RIA network “to meet the evolving needs of the industry.”

Shirl Penney

With the Dynasty Freedom Note, qualified advisors can choose to have up to 100% of their revenue paid to them as they transfer their business to independence with Dynasty’s support in exchange for an eight-year forgivable loan.

For example, an advisor can choose to receive 100% of their trailing 12-month revenues in a Dynasty Freedom Note and during the loan period receive 65% of their revenue. The 35% of revenue that Dynasty receives covers loan interest, regular principle servicing and access to Dynasty’s entire core services package to support the middle- and back-office needs of their RIA.

Dynasty’s core services include a customized technology stack, an integrated proprietary advisor desktop for delivering a digital client experience, ongoing compliance support, books and records and general finance function support, strategic analysis, and business planning, according to the company.

The Dynasty Freedom Note program is available to advisors through Dynasty Capital Strategies, a subsidiary of the RIA network. DCS also provides traditional loans and structured minority capital to RIAs to allow for diversification, M&A needs, or to fund succession planning, according to the company.