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Financial services executive predicts ‘more shoes to drop’ before economy recovers

Brian Hartz

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Shirl Penney is the founder and CEO of Dynasty Financial Partners. Photo courtesy of Dynasty Financial Partners.

Dynasty Financial Partners, a disruptive financial services firm that moved from Manhattan to St. Petersburg in 2019, celebrated its 10-year anniversary this past week, but amid the celebrations, founder and CEO Shirl Penney took some time to share his thoughts about where the economy is headed in 2021.

Penney launched Dynasty at the tail end of the 2008-09 recession, which was particularly hard on companies in the banking and finance sector. He took a tech-centric approach to his idea, coming up with a business model that offered financial advisors a way to become independent of large firms without plowing tons of capital into technology and back-office operations. 

“There are lots of advisors who want to be independent,” Penney said, “but don’t want to run their own business.” 

A prime example is St. Pete-based Cyndeo Wealth Partners, founded by Matt Kilgroe, who spent nearly three decades with UBS Financial and Merrill Lynch before striking a deal with Dynasty. Being part of Dynasty’s network means Cyndeo can access a robust suite of fintech tools, ranging from data aggregation to financial modeling and more. Dynasty’s offerings also include an online research center, consulting services and analytical tools. 

The model has proved to be wildly successful — in roughly a decade, Dynasty’s platform has grown to more than $50 billion in assets under management. 

Penney sees some parallels between today’s Covid-19 crisis and the financial crisis and housing market crash of a decade ago. The key, he said, is that “tech-enabled” businesses are the ones that will not only survive, but thrive. 

“Whether it’s Amazon or Zoom or any of the names that have disproportionately won [during the pandemic], I think the firms that have done a nice job of tech-enabling their businesses are going to win disproportionally,” Penney said. “Whenever there’s a shock to the system, that usually accelerates trends that were already under way.”

Penney said Dynasty and the advisors it works with did about five years’ worth of technological upgrades in about five months. “Since our advisors were definitely on the cutting edge from a tech perspective, they did really well. They grew and are continuing to grow through the pandemic.”

Looking ahead, Penney said the economy has likely only begun to feel the latest shock to the system: “There probably are going to be some more shoes to drop,” he said. 

“In cities like New York,” he added, “I’m hearing that north of 50 percent, that’s five zero, of restaurants may never reopen. And those restaurants are big tenants, so that starts to back up on the landlords, in addition to all the commercial real estate footprints that are shrinking and firms like ours that are leaving. And then ultimately the landlords feel distress. And then that backs up into the banks, who carry the credit.”

Like subprime mortgages in the last economic downturn, Penney sees student debt as a bubble waiting to burst. Add to that underfunded pension funds and infrastructure, including hospitals, as well as a general lack of financial literacy on the part of many Americans, and you have a recipe for a stew of economic trouble. 

“More broadly speaking,” he said, “75 percent of Americans can’t put their hand on a thousand dollars in an emergency. There’s just a lot of pockets around the country where the financial health of individuals and institutions is not that strong.” 

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