Jim Dickson, the founder and former CEO of Sanctuary Wealth, has resurfaced 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-owned financial services holding company, on the new venture. He's the son of Roger Penske, retired American professional auto racing driver and founder of Penske Corporation.
“I had a year off to study the business,” Dickson said in an interview with WealthManagement.com. “And the challenge that I had with the aggregation space is, a lot of the advisors will sell their practice and then check out. They're done; they've 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 Outsourced 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 the middle- and back-office business functions to support advisors. Advisors that join Elevation Point will have the option to come 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 airplane while flying it once; I didn't want to do that again,” Dickson said, referring to his earlier effort launching and running Sanctuary Wealth. “Those 40 people at Mount Yale gave us an immediate back office, gave us an immediate chassis of which to operate with, a clean ADV and really experienced people that we could scale and get to market quickly.”
Elevation Point was launched through an oversubscribed funding round from 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 a supported independence platform for advisors coming out of the wirehouses. It grew rapidly under his leadership into a national network of independent wealth managers, with $27 billion in assets and 300 advisors across 28 states.
But in a surprise move last February, he was abruptly replaced as CEO by Adam Malamed, a former Ladenburg Thalmann executive and member of Sanctuary’s board of directors.
Dickson declined to say why he was terminated other than to suggest he and his investors at the time had competing visions for the firm. “I think we just had a different compass,” he said. He remains the largest non-institutional shareholder of Sanctuary. “I'm really focused on the windshield, not the rearview mirror.”
A Sanctuary spokesperson said, "As we stated in February 2023, Jim Dickson was terminated for cause by the Board, and beyond this, Sanctuary has no comment."
Speaking at the MarketCounsel Summit in Las Vegas last December, Dickson reflected on his time at Sanctuary, in particular his struggle to balance the rapid growth of new advisors joining with maintaining service to existing ones and the pitfalls of taking on capital partners.
He’s looking to build something different with Elevation Point and avoid some of the rapid-growth issues he grappled with at Sanctuary, he said. Elevation Point will not be an aggregator nor a turnaround shop, but rather an “accelerator,” partnering with advisors to help them recognize and enhance their unique value propositions and grow by removing operational constraints.
“This time around, 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 entered the business of investing in RIAs and helping launch independent practices.
“But what you notice when you start to look under the covers 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 candidly, we also believe that having an ecosystem of these firms that have similar characteristics and have a stable of subject matter experts that we can bring in, we can accelerate them.”
Elevation Point will help advisors find talent, expand marketing strategies and formalize business development. For instance, it will help the advisors hone in on a relevant client niche or service offering.
The firm will also provide technology. It’s currently working with CRM provider PractiFi and data reporting provider Addepar as its primary tech partners. Elevation Point will be open to all custodians.
The firm will take a minimum 20% stake in the RIAs it invests in. It will not have a broker/dealer.
They will also be launching a private investment network called Alt:62, to give partner firms and their clients access to private investment opportunities that arise through the 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 pushing proprietary products, and it's not planned to be a profit center for the firm. That may include investments in film rights, mineral deals and small- to medium-size private businesses.
“We're looking at that as a growth engine for our financial advisors to be a matchmaker or a connector to unique opportunities that'll really differentiate them in the marketplace,” he said. "These aren't things you can just find everywhere.
“We're going to let the advisor 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 into those opportunities and we didn't let them make the decision.”