Is Dynasty Financial Partners Inc. IPO a Good Buy?

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Contributor, Benzinga
February 15, 2022
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Though the do-it-yourself industry represents a multi-billion-dollar ecosystem, the massive dollar amount hides a central irony. While people can save some cash performing desired endeavors on their own, money is a multi-dimensional concept. In other words, excessive time expenditures can easily create economic inefficiencies.

And that’s the central premise behind Dynasty Financial Partners Inc., essentially an administrative accelerant for independent wealth managers. Sometimes, it’s better to let the experts handle specific concerns, although the unique headwinds of the new normal present serious challenges that you shouldn’t ignore.

What Does Dynasty Financial Partners Do?

Founded in 2010, Dynasty Financial Partners specializes in supporting financial advisors in setting up and operating independent wealth management firms. Primarily, the company’s core business involves providing middle-office (transaction processing) and back-office support roles. This segment was responsible for slightly over half the total revenue that Dynasty generated in 2020.

Today, the brand is perhaps best associated with its “wealthtech” platform or the integration of wealth management strategies with the latest technologies. As Dynasty’s website claims, its mission is to unlock the potential for independent advisors to branch out on their own, thus providing a custom-made solution for their clients.

To accomplish this task, Dynasty cuts the learning curve for entrepreneurs in the wealth management segment, offering myriad proprietary software and technology platforms to accelerate progress — ultimately guiding individual clients to financial success.

When is the Dynasty Financial Partners IPO Date?

After a scorching heat wave of new listings over the trailing two years, 2022 was almost inevitably due for a healthy correction. As with anything in life, excessive exuberance is not an indefinitely sustainable endeavor. However, after a choppy month in January, companies appear more interested in launching an initial public offering (IPO), or the first time a private enterprise distributes its equity shares to retail investors.

In Dynasty Financial Partners’ case, management filed a Form S-1 (colloquially known as an IPO prospectus) with the U.S. Securities and Exchange Commission (SEC) on Jan. 19, 2022. Under the terms of the deal, the wealthtech firm will be looking to raise up to $100 million. Likely, this figure is a temporary placeholder, with the demand profile for the offering poised to modulate it.

At the time of writing, no per-share data for the IPO was available. As well, management has not yet provided a firm date for inclusion into the IPO calendar. However, Dynasty disclosed that it was seeking to list on the Nasdaq exchange under the ticker symbol DSTY. Goldman Sachs Group Inc. (NYSE: GS), JPMorgan Chase & Co. (NYSE: JPM), Citigroup Inc. (NYSE: C) and Royal Bank of Canada (NYSE: RY) represent the joint bookrunners for the deal.

An intriguing idea among upcoming new listings, DSTY stock also finds itself in an awkward situation. Mainly, the surrounding circumstances that have caused much volatility in global capital markets — including for risk-on subsegments like IPOs — are also the possible upside catalyst for Dynasty’s core business model.

A famous adage states that “you make most of your money in a bear market; you just don’t realize it at the time.” Theoretically, then, the downturn presents an excellent opportunity for financial advisors seeking to set up their own independent wealth management firms. Fortuitously as well, those who sat on the sidelines during the spring doldrums of 2020 have seen with their own eyes how lack of participation could yield deep regrets.

Therefore, the messaging that financial advisors will surely adopt — that over the long term, time in the market beats timing the market — may resonate much more effectively with prospective clients than if they had not witnessed 2020’s meteoric rise from the ashes.

Nevertheless, the flipside to the above argument is that the broader equities sector is volatile for good reason. For one thing, searing consumer inflation may force the Federal Reserve to take decisive action quicker than anticipated, likely entailing higher costs of borrowing. In turn, such a monetary profile would thwart the upward trajectory of growth stocks.

Second and more critically, tensions in eastern Europe have skyrocketed, with last-minute efforts at diplomacy apparently bearing no fruit. Should Russia take the dangerous path of invading Ukraine, the entire global order could be thrown into disarray.

What Analysts are Saying About Dynasty Financial Partners IPO

As with most IPOs, the public market debut of Dynasty Financial would allow it to accelerate its growth ambitions; specifically, management could leverage some of the raised capital to support acquisitions to bolster Dynasty’s open-architecture software platform. However, the downside of this offering is that it exposes the wealthtech firm to more regulatory scrutiny.

According to Marina Shtyrkov, associate director for wealth management at Cerulli Associates, financial firms like Dynasty have two pathways for growth: a slower route that involves steadily operating in the core business or a faster route, which essentially entails skipping the line through acquisitions. The latter approach “is going to quicken the pace of growth because they’re going to be able to take in more of those acquisitions, which is again the faster path,” per Shtyrkov.

Another benefit to Dynasty going public is that it will give the firm access to permanent capital, noted Stephen Caruso, research analyst for wealth management at Cerulli. Through this channel of retail investor capital, Dynasty will be able to reinvest into its platform.

On a similar sentiment, Matthew Radgowski, head of client solutions, advisor segment at Morningstar, stated that going public will also help Dynasty with technology updates and enhancements. Because of the massive influx of new tech and capabilities, financial firms are able to provide what Radgowski called “hyper-personalized portfolios.”

While the upcoming debut of DSTY stock is compelling on multiple fronts, Caruso also warned that the underlying company must open itself to accountability across more people and institutions. As the analyst put it, there will be “a new level of scrutiny applied to their business” because “people will be able to analyze their filings year-over-year.”

“That’s like looking at the black box,” Caruso bluntly stated, “[Y]ou get to look under the hood and see what Dynasty’s offering to their affiliates beyond just what the marketing website says.”

Finally, the wealthtech specialist will now also be beholden to the shareholder, which would represent a change of pace from operating as a private company. Therefore, it’s not just regulatory scrutiny that Dynasty has to worry about: perform poorly and angry stakeholders could kick up a storm.

Dynasty Financial History

While many questions abound regarding the viability of DSTY stock, Dynasty’s financial performance may help move the needle in its market debut’s favor. Mainly, the company has generated sizable growth in both the top and bottom line, suggesting real hunger among high-net-worth clients — Dynasty’s bread and butter — to navigate the hectic market environment of the new normal.

For instance, in 2019, the company generated $40.5 million in total revenue. However, despite the impact of the COVID-19 pandemic, Dynasty managed to post sales of $46.2 million one year later. Moreover, the net income accrued in 2020 amounted to $4.84 million, almost five times higher than the net income of $1.05 million produced in the prior year.

More recently, Dynasty rang up top-line sales of $49.2 million in the nine months ending Sept. 30, 2021. This tally represented a 50% increase from the $32.7 million generated against the year-ago comparison, implying robust demand for financial guidance during this unique period. Even more impressive, net income for the first three quarters of 2021 was $10.6 million, a massive improvement from the net income of $2.94 million during the corresponding period in 2020.

Dynasty Potential

Despite long-signaled warning signs that the capital market could correct, investors have not demonstrated much concern, based on the high magnitude of stock trading on margin. Indeed, this speculative practice of borrowing money to acquire equities is still near all-time recorded highs, suggesting that demand for well-researched financial advice remains robust.

Further, almost anyone can make money during a comprehensive bull market. However, a wealth management firm truly earns its stripes when it helps its clients survive and thrive during a bear market. Obviously, with so much wealth accrued over the trailing two years, more people will be interested in protecting their gains, thus indirectly boding well for DSTY stock.

On the other hand, geopolitical tensions truly threaten to turn the market and the global economy upside down. As a recent CNN Politics article argued, a Russian invasion of Ukraine would hurt Americans too. Primarily, U.S. consumers would feel the impact through a sharp rise in gasoline prices. And since hydrocarbons undergird the manufacturing of mundane products like plastics, prices of other goods could equally soar.

In such a dire scenario, it’s not entirely clear how wealth management services would fare, especially since the global markets could print crimson ink across the board.

Where to Buy Dynasty IPO Stock

Those interested in participating in Dynasty’s IPO must acquire shares at the open, necessitating knowing how to buy stocks. But first, investors should consider opening an account with one of the best brokers below.

DSTY Restrictions for Retail Investors

Review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons before participating in an IPO. Don’t engage if you have privileged information.


Unfortunately, the window for Dynasty’s pre-IPO opportunity has closed. However, you can check out Freedom Finance to review compelling new listings coming up the pipeline.

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About Joshua Enomoto

His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.