Shirl Penney: Dynasty's OpenArc deal marks 'watershed moment' for RIAs

Amid the ongoing legal fallout of OpenArc’s breakaway move from Merrill Lynch, Dynasty CEO Shirl Penney contends the $129 billion mega-team’s decision represents a “watershed moment” of momentum for the independent RIA model over wirehouses.

Dynasty Financial Partners, an investment bank and RIA services provider, acquired a minority equity stake in Atlanta-based OpenArc Corporate Advisory as part of its breakaway from Merrill Lynch. Merrill has filed a federal lawsuit against OpenArc, Dynasty and OpenArc’s new custodian partner Charles Schwab, alleging they conspired to form a “pre-meditated corporate raid” amid the OpenArc advisor team’s decision to leave the wirehouse.

“The size and scale of it, and the complexity, I think is material,” Penney told InvestmentNews in an interview on Monday. “And why I think it's such a huge watershed moment is, any advisor who might still be in some form of captivity or feeling trapped and looking to get liberated if you will, can look at this and say if they can do it, then I can do it.”

OpenArc responded to Merrill in a Friday court filing. “For the past five years, Merrill has not meaningfully invested in the business division wherein Defendants worked, resulting in staggering losses of clients that was not sustainable,” reads part of OpenArc’s 123-page legal response. Dynasty has also shared the following statement in response to Merrill’s allegations of broker protocol recruiting violations:

“Dynasty takes the protocol for broker recruitment very seriously. We are also strong advocates for advisor and client choice and believe that leadership by fear is not a long-term strategy on how to retain the best advisors and serve their clients over time. Fear will not dictate the actions of the most independent minded advisors who seek the best outcome for their clients, teams, and their families,” the company said in a statement.

“We originally were introduced to them [OpenArc] by Diamond Consultants, by Louis and Mindy Diamond,” added Penney, who also discussed OpenArc’s transition on Louis Diamond’s podcast.  

Former Merrill employees leading OpenArc include new managing partner Jeff Crowell and senior managing partner Erik Bjerke, while Jim Kaufman will lead the RIA’s charitable fund strategy. Penney has joined OpenArc’s board of directors. Jessica Polito, founder of wealth management M&A advisory Turkey Hill Management, echoed Penney’s sentiments regarding the significance of OpenArc’s large-scale independent move from a wirehouse.

“It is proof that the independent RIA model and what it stands for appeals to everyone,” Polito told InvestmentNews. “I think it stands as a really strong reference point for all of the $5, $10, $15, $30-billion teams that are all nestled within large wirehouses who would like to make the move to independence, but feel like they're so entangled with the wirehouse that they can't, that it is possible.”

The OpenArc team managed $129 billion in assets while at Merrill Lynch, making it the third-largest private wealth team, per 2025 rankings from Barron’s. “Think about it as $100 billion in corporate related assets, meaning stock plan and 401K retirement accounts, and then the rest of it is in direct retail accounts,” Penney said of OpenArc’s AUM. "I think the wealth managers have north of $20 billion.”

Polito, who has advised on M&A transactions involving some of the RIA industry’s largest firms such as Lido Advisors and Hightower, explained that lending services related to mortgage rates and real estate are a key reason she sees advisors being skeptical of leaving their wirehouse structure. Merrill Lynch is owned by Bank of America. 

“The conversations that I have with these multi-billion dollar firms is that by the time you get that big, all of your clients are just completely entangled in the other products that the bank offers,” Polito said. “And the concern is that the clients won't follow the advisors' because they like the rates they're getting on their mortgage, and the commercial loans that they have outstanding with the bank, and all the other stuff that makes the relationship so sticky on purpose.”

More than 55 firms and over 500 advisors operate within Dynasty’s network, which has $120 billion in platform assets and equips RIAs with a turnkey asset management program (TAMP), technology and digital lead generation in addition to being an investment bank. On Monday, Dynasty announced its closing of a $125 million corporate credit facility with backing from UMB Bank N.A., Flagstar Bank N.A., J.P. Morgan Chase Bank, and Goldman Sachs. The capital replaces a $50 million credit facility previously held by Dynasty, said Penney.

“We have a very strong balance sheet, I'm happy to say well north of nine figures in cash in the business,” said Penney. “We now have more capital that we can put behind a client to help facilitate getting a transaction done.”

Penney rejects the notion of RIAs being hamstrung by their lending capabilities compared to wirehouses. “It’s the opposite actually, they now have more choice. If you're in a captive environment — you're at a brokerage firm that's owned by a bank — then you have one choice. And [advisors] might say, well I know that this other bank has maybe a better product or better structure or better price, but you can't offer that to your client, and if you suggested it you could be fired for selling away,” said Penney.

“As an independent advisor on our platform, if they have a client that needs a loan or wants to hedge a concentrated stock position, a corporate executive, they have multiple choices,” he said. “They can literally shop the street with Dynasty's $125 billion and growing quick buying power behind them. They have multiple choices and the result of that competition often leads to better pricing and better execution.”