As Dynasty Financial Partners celebrates its second anniversary, the firm’s still got business development on its mind, but CEO Shirl Penney says he intends to limit his firm’s growth to no more than 150 firms. See: What exactly is Dynasty Financial Partners and why is the Smith Barney execs’ startup gaining so much attention?.

Dynasty currently has 15 firms in its network that comprises more than 40 advisor partners, which manage 21offices in the United States and manages more than $13 billion in assets under advisement.

“We don’t want any more than 150 firms,” Penney says. “We want to really deliver a focused service model and you can’t do that effectively with 1,000 firms. You have to limit the number of firms. We want to have a meaningful impact with the growth of our partner firms and to do that, we’re keeping the numbers small.”

Penney believes that by limiting its growth of new firms, Dynasty can help its partner firms to expand organically and inorganically by adding tuck-ins. He points out that the total number of advisors will be much higher than the ...

After a really rough patch in 2008 and 2009, Andrew Rudd is looking to build up Advisor Partners LLC to its former glory — and then some — with the hire of an esteemed veteran of Fidelity Investments and, most recently, Wealthfront Inc..

The principal owner of Advisor Software Inc., which owns Advisor Partners, appointed Kris McCabe as national director of sales and marketing for the company, reporting directly to Daniel Kern, president of Advisor Partners.

In this role, McCabe will be responsible for building relationships with advisors and institutions. Advisor Partners, founded in 2001, sells four separately managed accounts but its oldest, biggest and most famous one essentially is an index fund that harvests tax losses aggressively.

The McCabe hire marks a further return to offensive mode after the company was set back on its heels in the fall of 2008, when it sold itself to San Jose, Calif.-based Bellatore Financial Inc. — a deal that quickly went south. See: Long a tech innard for Schwab, LPL and TD, Advisor Software is looking to push its own brand with new product.

After assuming that the level of charitable donations would be down this year — a casualty of the impending fiscal cliff — executives of donor-advised funds have been pleasantly astounded to discover that donations are breaking records.

“We really started thinking: 'What’s going on?’ in January,” says Amy Danforth, senior vice president of marketing and programs of the Fidelity Charitable Gift Fund, the nation’s largest donor-advised-fund program. 'By June, we thought this was amazing. We really thought that there would be a pause button in the fall for the election, but it didn’t happen. Then, we thought there would be a pause after the election, but giving didn’t slow down. It’s only intensified.” See: Fidelity and Schwab donor-advised funds boast banner years.

In fact, Fidelity Charitable is poised to have the best year in its 21-year history. Through the third quarter, contributions to its donor-advised funds were up 63%. The firm has received $1.2 billion in donations to the donor-advised funds as of the end of the third quarter this year, up from $748 million at the end of the comparable period a year earlier. See ...

Brooke’s Note: The Sand Hill Road venture capital crowd doesn’t love the idea of the endless human interactions — and the inherent costs — that mark most successful relationships between investors and financial advisors. They have the confidence — or hubris — to believe they can create an ongoing, cheaper and superior advice service and deliver it to a laptop screen. But they also have the wisdom — or humility — to know that they don’t know everything. Andy Rachleff has radically shifted his Wealthfront RIA from being a purveyor of other RIAs’ advice to being an advisor for a niche market of the mass affluent. The new strategy is to be an ETF manager but with an ear out for client goals and with Burton Malkiel, the famous dart thrower, calling some shots. The company is not big yet, but its asset growth is notable.

One of the early venture capital-backed efforts at creating the Expedia.com of financial advice has a radically refurbished its business model and there are signs that it’s working much better than the old model. See: Why big RIAs are taking a risk on Wealthfront.

Wealthfront ...

If you are a fee-only or fee-based financial advisor, your key to success is building a critical mass of assets under management. Based on your ability to control assets, you will enjoy an enviable lifestyle during your working years and you will sell your business for two to four times revenue when you retire (Source: IFA Marketplace). That’s eight to 16 times higher than commission businesses that frequently sell for 0.25% of revenue.

The question is, what types of assets maximize your AUM business valuation?

We know assets are a measuring stick, but the number that really matters is the recurring revenue that you generate from the assets. For example, two advisors control $100 million each, but one generates $750,000 of fees and the other $1.5 million of fees. The explanation of the range may be as simple as different fee schedules or it may be the types of services that are provided by the advisors. See: Two advisors debate the financial viability of serving as a fiduciary to small accounts amid DOL’s new rules.

This article focuses on four types of assets that may ...

Brooke’s Note: I have a friend who is a principal of a big, successful RIA and he allows that he is bothered by the fact that his life is dedicated professionally mostly to making rich people get richer. This has been a bugaboo for many a competent advisor who is pulled one way by good business practices and another way by the heart. With some of the big pioneering people in the RIA business, such as Roger Hewins and Richard Steinberg, making big moves to serve smaller accounts, it seems possible that more advisors will be fulfilled and more investors served.

Steinberg Global Asset Management Ltd. is a classic RIA with a long-term relationship with Schwab Advisor Services, Advent Software Inc. and its own roster of about 200 clients.

The principal of the practice, Rich Steinberg (perhaps familiar to some people from appearances on the Nightly Business Report), has always erred on the side of keeping and expanding his core business of clients who mostly have $2 million to $5 million of assets. His clients have a combined $510 million of assets under management.

Steinberg, like many of his ...

LPL Financial LLC announced today that it has found a way to sell a sliver of Fortigent LLC research to a much bigger slice of the investing public.

The nation’s largest broker-dealer will make Fortigent’s manager selection, portfolio construction and ongoing management of two portfolios that are part of its booming model portfolio business, Model Wealth Portfolios. See: LPL Financial sees explosive asset growth of model portfolios by linking BlackRock and JPMorgan-level brand names to the little guy.

It’s the first time that the nation’s largest independent broker-dealer has tipped it hand as to how it will get a return on its acqusition of a firm that serves as an outsourcer of money management, largely to big RIAs. See: LPL makes big advance into the RIA business with Fortigent acquisition.

Lower volatility

“It’s the first milestone, and many more to come,” says John Moninger, LPL Financial executive vice president of advisory and brokerage consulting services. See: LPL makes big advance into the RIA business with Fortigent acquisition.

Brooke’s Note: As LPL’s largest advisor client, Ron Carson has already proven that he can succeed as an on-field ballplayer in the advisory business. He has also shown that he can coach from the bench with his loyal tribe of 1,000-plus advisors using the services of his second company, PEAK Advisor Alliance LLC. It is then hardly a stretch to imagine him making a move to fill the middle ground in that spectrum of business enterprises — a position on the arc where he is neither player nor coach but can call on the skills of both. His new venture, Carson Institutional Advisory, tucked within his existing RIA, is positioned to be both a turnkey asset management program and a strategic buying machine or one or the other, depending on what it turns out that advisors want. Ron has proven that he succeeds by playing off the big platforms of others, such as LPL. This time he found a way to also leverage Envestnet, TD Ameritrade and perhaps, Advizent, and he appears to be passing the advantages of scale along to clients in the form of low prices ...

Charles Schwab wasn’t about to be left in the dust in the midst of a massive price war in the ETF game and announced today that the firm is slashing its 15 ETF funds across the board. The weighted average of the 15 funds is just 7.7 basis points. See: Walt Bettinger hits back and shows that Charles Schwab won’t be bested in the brewing ETF price war.

The cuts were effective Thursday afternoon and give Schwab the title of being the cheapest of two broad equity ETFs on the marketplace today, which cost 4 basis points. The company’s Multi-Cap core ETF and Large Cap-Core are now just 4 basis points, down from 6 basis points.

Schwab’s move comes at a time when industry competitors have been making dramatic changes on ETFs. Last week, for instance, BlackRock CEO Laurence Fink said his firm would cut fees to compete with Vanguard. It also comes after revelations that Fidelity may be launching an ETF company — with a focus on sector investing and active management, where price is less of an issue. See: Fidelity launches major division in ...

When U.S. Trust bought Radnor Capital Management LLC in 1999, Radnor had $1.2 billion of assets under advisement, 26 employees and used its own broker-dealer.

Now Doug Pyle and Pierce Archer, original Radnor employees, have brought back the Radnor brand as an independent RIA with custody of assets at Schwab Advisor Services. The new firm, with a staff of five, including two advisors, will handle a combination of high-net-worth and institutional accounts. Most HNW clients are in the Philadelphia area. The company has more than $300 million of assets under management. See: The population of high net worth individuals is growing again, at fastest rate in four years.

While still at U.S. Trust, Pyle and Archer’s practice established a minor national presence by selling socially conscious fund management services to foundations, religious organizations and the like.

Radnor revival

There is a palpable joy from Pyle that he is no longer part of a big bank. He was most recently with Columbia Management, which Bank of America sold to Ameriprise after divvying up U.S. Trust. Archer was with Pennsylvania Trust. Neither Pyle, 51, nor Archer, 56 ...