Oak Street Liberates Strategic Capital For RIAs

Oak Street Funding is getting deadly serious about giving RIAs the liquidity and the support they need to survive and thrive in a rapidly consolidating financial marketplace. 

Whether that is expansion through acquisition, partner buy-ins or succession planning, Oak Street will be there to help ambitious RIAs free up the financing to exceed their goals.  

Oak Street has expertise – spanning back to 2003 – of serving the insurance industry and started leveraging that expertise with the RIA industry last year.

“For years, we’ve seen great success in the insurance industry.  We know that the insurance agencies consider their customer relationships as their most valuable asset. Registered Investment Advisors have a similar business model, and we pride ourselves in providing an opportunity for growth in these cash flow businesses,” says Rick Dennen, CEO of Oak Street Funding.

“Sometimes RIAs are so focused on their clients’ investments, that they aren’t considering their own investment opportunities,” added Dennen. “Investing in their own business now can have incredible payoffs in the long run.”

Many advisors aspire to increase their AUM but find it difficult to gain access to capital for the investment, given their lack of intangible assets to show the underwriters.

Put it in the simplest terms: it's a cash flow business, not a collateral enterprise.

Small business lenders who will work with advisors tend to look at the professional credit footprint, effectively turning the process back into a personal loan. Personal property and spousal consent get tangled into what should be a straightforward business decision.

With such high personal risks and a low funding opportunities, many RIAs have questioned whether the headache is worth the payoff.

But Oak Street recognizes that M&A isn't a frivolous thing for advisors who want to build a business to last. You want to be a consolidator, not someone who falls down before finishing the competitive marathon.

Oak Street funds can be used to hire an additional partner or fund a partner buyout, initiate a succession plan, consolidate debt, develop specialized services, enter new markets, invest in a marketing strategy, or upgrade technology.

In the 2016 Advisor Benchmarking RIA Trend Report: Practice Management & Operations, 68% of advisors identify "grow profit via higher AUM and revenues" as a top initiative for their business, and are most likely to consider organic growth strategies, like increasing business development, improving client satisfaction and improving strategic business planning

By buying and building relationships through portfolio acquisition, RIAs can actively increase their AUM, rather than passively waiting for current clients’ contributions and assets to grow.

It's really that simple. Why build a book when you can buy? And now, at last, you can buy that book.


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