Brooke's Note: Don't sleep on annuities as an alternative asset that RIAs could live with. David Lau has been saying that since 2014 and Vanguard piped up about it yesterday in putting annuities into target-date funds. But Lau and his DPL platform may have a big edge. Part of that is that the assets literally already exist inside many big RIA rollups – just in an ashamed state of living out their overpriced, hodge-podge lives as nondiscretionary leftovers from an old lifetime of youthful sin as a brokerage holding.  DPL's breakthrough is software and data-reading capability that allows it take the wheat and toss out the chaff and create instant AUM. If half of what it explained to me is true, selling this product's challenge might be convincing big RIAs that it's not all a little too good to be true. Enter Tom McCarthy who has a multi-decade career of making believers out of RIAs for AssetMark and Orion and who pretty much got hired on the spot at a Ritz-Carlton in Orange County.

DPL Financial Partners is making a rainmaking hire after experiencing meteoric growth by courting mega RIAs that mass convert books of commission annuities into fee-based products.

The Louisville, Ky.,  annuity and insurance platform has hired Tom McCarthy to lead sales and distribution for the firm. Previously, he was  executive vice president and head of wealth sales at Orion Advisor Solutions.

At Orion, he was credited with doubling RIA adoption of wealth services after being poached from AssetMark in 2023.

Now McCarthy is aiming for the triple crown by signing on to DPL ahead of what expects will be a run from single billions in AUM into the stratosphere.

“The business is booming,” says DPL CEO David Lau. “We've grown $1.4 billion to $5.6 billion [DPL annuity and insurance assets administered on its platform] in 12 months.”

DPL was founded in 2014 and now has 8,500 advisors managing a combined $3 trillion using its platform.

Restructuring data

Orion is a major DPL enterprise customer, and the firm harbors no hard feelings about McCarthy coming over, according to the DPL executives. See: DPL gets Envestnet to display its data in performance reports -- to complete Big Three that also includes Orion and Black Diamond, enabling RIAs to show -- and bill for -- annuities like asset funds

Before joining Orion in 2023, McCarthy was an early hire at AssetMark and helped grow the platform  to more than $100 billion in AUM from $1 billion.

McCarthy, who lives in Austin, Texas, says it's DPL's game to lose after establishing a capability that would be hard to replicate.

It involves, for one thing, turning the unstructured data of 3,000 old-time annuity products into structured data, Lau explains.

“Execution is the big challenge ahead of us,” he says in an RIABiz interview. “It reminds me of AssetMark when we were having to convince advisors to charge fees rather than commissions.”

“I believe DPL is positioned to more than double year-over-year growth at a scale unprecedented in this category,” he adds in a release.

Evolution

Lau and McCarthy met up at the ECHELON Group Deals and Dealmakers Summit in Laguna Niguel, Calif. in August and promptly spent “20 hours” talking about working together. RIABiz attended the Dan Seivert event and filed this report.

Lau attributes the surge in growth to his firm's ability to attract giant RIAs that have grown by acquisition – some of which may have as many as 10,000 old annuities accumulated from the M&A process.

Read more at RIABiz