A hungry NYC-based firm takes aim at a bigger future by signing on with Dynasty Financial Partners

Further Lane kept hearing about the vendor of vendors -- then paid a visit, and also put Black Diamond and Callan in its cart

Thursday 5.3.12 by Brooke Southall

If Michael Araiz were in retail, he might own a general store. His advisory practice, Further Lane Asset Management LLC, is relatively small in stature but multifaceted — with a broker-dealer, an RIA/wealth manager and two hedge funds all under one roof.

The assets for the wealth management agglomeration are about $500 million combined and the ADV for the RIA lists $195 million of assets under advisement. Founded in 1996, the company also has 50 employees with offices in New York City, East Hampton, N.Y.; San Francisco; Santa Fe, N.M.; and Boerne, Texas.

Araiz, 51, enjoys presiding over his mini-empire but he has been interested in seeing it grow. So when the entrepreneur started hearing buzz about a new company with an unusual business plan just a few blocks away, he paid a visit.

“Six months ago, we didn’t know of Dynasty and then the name came up in three, four or five conversations with people in our industry,” Araiz says. “Within 10 minutes in their offices, we realized this was more than a meet and greet for us.” See: What exactly is Dynasty Financial Partners and why is the Smith Barney execs’ startup gaining so much attention?.

Dynasty Financial Partners, a vendor of vendors that provides full-service support for RIAs, announced today that it had added Further Lane as a client. See: The top 10 people to watch in the RIA business in 2012, Part 2.

Aiming for $1 billion

A fixed-income expert who has been able to generate in-house research for related asset classes, Araiz aims to serve the largest institutional clients with the best research. But recently, with clients asking him to take on more management of equities, Araiz realized he needed access to wider-ranging research. And because he holds some unusual asset classes in portfolios, Araiz needed better reporting capabilities, too.

“This is a great example of an independent firm choosing to upgrade their platform, free up time, get unique access to our technology, research, etc, and position themselves for aggressive growth,” says Shirl Penney, chief executive of Dynasty. “Our game plan is to help them build a [$1 billion AUM] RIA business. It’s fun to partner with great people and help them do great things.”

Shirl Penney: Our game plan is to help them build a [$1 billion AUM] RIA business.
Shirl Penney: Our game plan is
to help them build a [$1
billion AUM] RIA business.

Having signed on with Dynasty, Araiz is switching from using Schwab PortfolioCenter as his primary reporting software to Black Diamond. See: Schwab PortfolioCenter may be poised to shed its utilitarian image.

He is also gaining access to Callan Associates Inc. manager research for the first time. See: Attack of the killer app: Dynasty targets the corner-office broker by combining Envestnet and Callan.

Araiz believes that this level of research and technology may prove transformative for his business.

“Dealing with Dynasty, and particularly [partner and director of strategic implementation] Tim Bello, has absolutely reinvigorated our business plan,” Araiz says. “It’s given us a reason to be excited again. We had concerns we weren’t providing the best managers and services. Dynasty allows us to level the playing field.” See: Dynasty Financial Partners brings on Timothy Bello from SkyBridge Capital.

Esoteric needs

Tracy Thompson, senior sales executive for strategic relationships at Black Diamond, says that his company had to address Further Lane’s unique needs. See: Why Advent and Black Diamond are merging and how advisors look at the deal.

“Further Lane was looking for a system which would allow them the flexible mobility to work efficiently from any location. Further Lane was also focused on unique per-user customized views to allow for maximum efficiency, scale and communication improvements.”

But even Black Diamond may face some challenges in catering to the special needs of his firm, says Araiz.

“We’re hoping that Black Diamond can do what we need. We expect some challenges. They’ll need to do some customizing … we have to invest in more esoteric investments.”

He adds that PortfolioCenter has not disappointed him. “It’s been the best that we have found.” See: One RIA’s unvarnished views on Advent, Black Diamond, Tamarac, IAS, Orion and Schwab PortfolioCenter after an odyssey of test drives.

All aboard

Further Lane uses Pershing Advisor Solutions LLC as its primary custodian and does not expect to change where it parks assets. Araiz says that it speaks well of Dynasty that it has not urged him to do so.

“We’re extremely comfortable with Pershing. We’ve had no pressure to use Fidelity and Schwab [from Dynasty]. I like Pershing. They’re thrilled that I’m with Pershing.” See: What headway Pershing’s RIA unit is making after four years under Mark Tibergien.

And Dynasty has improved Araiz’s relationship with Pershing by introducing him to employees that he hadn’t met in his 12-year relationship with the Jersey City, N.J.-based firm.

Once Further Lane gets settled into its new platform, Araiz is interested in bringing more advisors aboard from Wall Street firms.

“We think we have a real opportunity to attract people,” he says.

Man about town

From 1998 to 2001, Araiz was the executive vice-president and senior managing director of the New York office of Imperial Capital LLC and managed more than $500 million of assets of high-net-worth individuals and worked closely with the management of large institutional accounts.

Prior to joining Imperial, Araiz was the senior managing director in charge of all fixed-income sales and trading and a member of the board of directors at Ladenburg Thalmann, a broker-dealer in New York City.

Araiz was a founding partner and member of the board of directors at M.J. Whitman Inc., a broker-dealer in New York City, from 1988-97. He founded the distressed, high-yield, high-grade, private-securities and real estate groups. From 1990 to 1997 Araiz was also a founding shareholder of EQSF Advisors, a registered investment advisor and advisor to the Third Avenue Funds.

Araiz was born in 1961 in Mexico and graduated from Brandeis University, with a B.A. in sociology.

Michael Araiz | Shirl Penney | Tim Bello

Further Lane | Dynasty Financial Partners | Black Diamond | Schwab | PortfolioCenter | Callan Associates | Pershing Advisor Solutions