Jim Dickson, the founder and former CEO of Sanctuary Wealth, has re-emerged with the launch of Elevation Point, an investment firm he says will take minority stakes in RIAs with $200 million to $3 billion in client assets and 'help those firms grow. Dickson has partnered with Mark Penske, founder and chairman of United Atlantic Capital, a privately held financial services company, on the new venture.
“I had a year off to study business,” Dickson said in an interview with WealthManagement.com. “And the challenge I've had with the aggregation space is that a lot of advisers will sell their practice and then check out. They have finished; they sold it. We were looking for more alignment.”
In conjunction with the launch, Elevation Point has agreed to acquire Mount Yale Capital Group, an RIA and Chief Investment Officer with $3.4 billion in assets under management. John Sabre, CEO and managing partner at Mount Yale since 2003, will become executive chairman of Elevation Point. The transaction is expected to close this month.
While Mount Yale will cease to exist as a brand, its ADV will serve as Elevation Point's corporate RIA for future deals. Mount Yale will provide middle and back office business functions to support advisors. Advisors joining Elevation Point will have the option to log in under its ADV or use their own registration.
Dickson said they agreed to buy Mount Yale because they wanted to have the infrastructure in place early on.
“I built the plane by flying it once; I didn't want to do that anymore,” said Dickson, referring to his previous efforts in starting and running Sanctuary Wealth. “Those 40 people at Mount Yale gave us an immediate office, gave us an immediate chassis to operate with, a clean ADV and very experienced people that we could scale and get to market quickly .”
Elevation Point was launched through a funding round oversubscribed by a combination of family office investors and some debt capital, Dickson said. He declined to say how much was raised or which family offices participated.
Dickson, a former Merrill Lynch executive, launched Sanctuary Wealth in 2018 as an independence-backed platform for advisers breaking out of the wire. It grew rapidly under his leadership into a national network of independent wealth managers, with $27 billion in assets and 300 advisors in 28 states.
But in a sudden move last February, he was was suddenly replaced as CEO by Adam Malameda former Ladenburg Thalmann executive and member of Sanctuary's board of directors.
Dickson declined to say why he was terminated, other than to suggest that he and his investors at the time had competing visions for the firm. “I think we had a different compass,” he said. He remains Sanctuary's largest non-institutional shareholder. “I'm focused on the windshield, not the rearview mirror.”
A spokesman for Sanctuary said: “As we said in February 2023, Jim Dickson was terminated for cause by the Board, and beyond that, Sanctuary has no comment.”
Speaking at the Market Council Summit in Las Vegas last December, Dickson reflected on his time at Sanctuary, particularly his struggle to balance the rapid growth of new advisors joining with maintaining service to existing ones and the pitfalls of taking capital partners.
He's looking to build something different with Elevation Point and avoid some of the problems of rapid growth he faced at Sanctuary, he said. Elevation Point will not be an aggregator nor a flip shop, but rather an “accelerator,” partnering with advisors to help them recognize and improve their unique value propositions and grow by removing operational constraints.
“This time, for me, I didn't want to be a platformer,” he said. “I wanted to be a partner.”
In the years since he launched Sanctuary, many firms have followed that model and gotten into the business of investing in RIAs and helping launch independent practices.
“But what you notice when you start to look under the hood and see the business, all the value they add is in the first 12 months,” he said. “And we want to be somebody that adds value through the lifecycle of that partner firm, and frankly, we also believe that by having an ecosystem of these firms that have similar characteristics and have a stable of subject matter experts that we can behavior, we can accelerate them.”
Elevation Point will help advisors find talent, expand marketing strategies and formalize business development. For example, it will help advisors advance in a relevant client niche or service offering.
The firm will also provide technology. It is currently working with CRM provider PractiFi and data reporting provider Addepar as key technology partners. Elevation Point will be open to all caregivers.
The firm will receive a minimum of 20% of the shares in the RIA in which it invests. It will not have a broker/dealer.
They will also launch a private investment network called Alt:62, to give partner firms and their clients access to private investment opportunities arising through family office partners. Some of the family offices that invested in Elevation Point were interested in co-investing in these opportunities with its partner firms, Dickson said.
He doesn't see it as a push for proprietary products, and it's not planned to be a profit center for the firm. This can include investments in film rights, mineral deals and private small and medium-sized businesses.
“We're looking at it as a growth engine for our financial advisors to be a matchmaker or a connector of unique opportunities that will really differentiate them in the marketplace,” he said. “These are not things you can find anywhere.
“We're going to let the adviser drive that process and drive that decision, which we think is really, really different,” he said. “But I think it would be a mistake if we had that ability to connect with those opportunities and we didn't let them make the decision.”