Advisors can now access many of the benefits of working with Dynasty Financial Partner through technology they already use.

Through a partnership with Envestnet, St. Petersburg, Fla.-based Dynasty Financial Partners is making many its services for RIAs available to non-partner firms for the first time.

The Envestnet Advisor Services Exchange by Dynasty (ASx) program will offer Dynasty’s vaunted valuation and financing services for advisors to advisors using Envestnet Analytics’ Recommendation Engine among its eight services and tools intended to help advisors grow their businesses in a more efficient manner.

“One of the things we believe in strongly is the ongoing professionalization of the RIA marketplace,” said Ed Swenson, president of ASx and COO of Dynasty Financial Partners. “This gives advisors access to capabilities and services that will allow them to do just that, whether it’s capital, m&A, or marketing.”

While Envestnet’s new Recommendations Engine allows advisors to bring AI-enhanced deep data into their client relationships, ASx applies similar technology to business development and practice management, said Swenson.

“While much of wealthtech and fintech is focused on the end-client experience, what we’re doing now is really focusing on the advisor with ASx,” he said. “That means helping them find better and more efficient ways of running their practice.”

The eight services encompassed by ASx are: outsourced CFO, outsourced compliance, marketing assistance, financing, M&A valuation, data and analytics and investing via its turnkey asset management platform (TAMP). The services will be available in an unbundled, component-by-component manner.

These services will differ from the ones Dynasty already offers to advisors, said Swenson. While Dynasty takes a consultative approach when working with RIAs, ASx will focus on digitization and data.

“This is a much more productized approach to these services than what Dynasty offers,” he said. “We think coming out of the post-Covid world, three or four trends will really take hold, and one of these is the digitization of services. That’s what ASx is intended to be – it’s a different experience.”

For example, ASx’s Capital Strategies tool allows advisors to seek financing for succession planning, M&A or other purposes via a streamlined interface that imports data about their firm through the Envestnet platform. Advisors will be prompted to answer a short set of questions – which Swenson describes as five to 20 minutes worth of work. After submitting their answers, ASx underwriters will respond to funding requests with prequalification within 48 hours.

If approved, advisors will be able to access debt financing of up to 50% of their trailing 12-month revenue. Swenson describes it as “equity-like” financing, because advisors will be able to retain their ownership rights.

Moving forward, ASx will handle all business-to-business financing across the Envestnet platform.

The post-Covid world that Swenson envisions will also involve continued – perhaps accelerated – outsourcing of services, which is where ASx’s outsourced CFO and compliance offerings come in.

“Partnerships are going to be more important, as will be the ability to share data and engage in virtual services and communicaction,” he said. “We’ve just seen more technology evolution in the past three months than we expected to see through the next three years. We’re all looking at the world differently, and technology has become more essential.”

ASx also uses Envestnet’s platform to offer advisors key performance insights. An advisor scorecard made available via ASx will allow advisors to benchmark their firms against their peers, said Swenson. For example, a $500 million AUM advisor spending 15% of their budget on marketing every year will be able to see how they compare to other similarly sized advisors.

ASx will also offer advisors “transition guidance” to help them acclimate to its tools.

Unlike Dynasty, which works with firms with an average AUM of $750 million, Swenson said that ASx is intended for firms with approximately $250 million AUM and up, with a target average of around $400 million.

That means a large portion of the 100,000 advisors using Envestnet’s technology will be able to take advantage of ASx, which will be available to them via an ASx card visible on the Envestnet Analytics dashboard.

Services will be made available on a tiered basis, with “silver” being the most basic  tier, “gold” representing a higher level of service, and “custom” being the highest tier.

ASx was first announced in January as Envestnet took a minority stake in Dynasty, but few details were revealed until Swenson hosted a session about the program as part of Envestnet’s 2020 Advisor Summit On-Demand at the end of June.

ASx will work with 20 RIAs as part of the first wave of its program, offering them access to Envestnet Analytics free of charge. Swenson said that advisors interested in being part of this first wave have a two-month window to take advantage of it, and then ASx will open to serve more RIAs once that inaugural class is on board.

“The next evolution of business – not just wealth management, but all business – is that we can now get realtime feedback and use data to create efficiencies, increase profitability and produce better outcomes for clients in ways that we weren’t able to before,” he said. “That’s why we’re excited about this partnership.

“At Envestnet, (late CEO) Jud Begman and (current CEO) Bill Crager have talked about the Kasparov principle, named after chess grandmaster Gary Kasparov. The principle is that machine plus human is stronger than human and human, or machine and machine. If you have integrations and great technology, you’re now in a place where you can operate extremely efficiently, and that’s the exciting next act of wealthtech.”