Our Approach
Structured for the Sector
Our underwriting and structuring approach is purpose-built for wealth management. We understand the nuances of advisory fee cash flows, platform dynamics, and regulatory requirements.
What We Underwrite
Cash Flow First
Our underwriting centres on advisory fee cash flows. Unlike traditional asset-based lending, we focus on the predictability and quality of recurring fee revenue—the economic engine of wealth management businesses.
Advisory Fee Quality
- Fee structure and billing frequency
- Client tenure and retention rates
- AUM composition and concentration
- Platform dependency and portability
Book-Level Dynamics
- Client demographics and life stage
- Asset allocation and product mix
- Referral sources and growth trajectory
- Service model and pricing power
Platform Infrastructure
- Custody and clearing arrangements
- Supervision and compliance framework
- Technology and operational capability
- Succession planning and continuity
Risk Posture
Built-In Resilience
Wealth management books have characteristics that lend themselves to credit structures. Fee revenue is diversified across many households, client relationships are sticky, and the business model is capital light.
Typical books have hundreds of households, limiting single-client concentration
RIA client retention has averaged near 97% for a decade
Minimal capex, no inventory, limited working capital needs
Structuring Toolkit
Flexible by Design
Covenant Framework
Appropriate financial covenants that protect capital while providing operating flexibility. Tailored to wealth management metrics rather than generic credit ratios.
Cash Flow Sweeps
Structured sweeps that accelerate repayment from excess cash flow without constraining growth. Aligned with the natural cash generation of fee-based businesses.
Security Structures
Security interests in advisory fee receivables and contractual revenue streams. Designed to be effective within regulatory constraints.
Prepayment Terms
Balanced prepayment provisions that protect yield while allowing flexibility. Declining premiums that recognize the value of optionality.
Regulatory Framework
Operating Inside the Lines
Every structure we design is built to work within existing FINRA and SEC frameworks. We understand the regulatory landscape and work alongside compliance teams and counsel to ensure alignment.
Customer Protection Rules
SEC Rules 15c3-3 and 15c3-1 create important protections for customer assets. Our structures respect these boundaries and do not seek to circumvent them.
Client Consent
Where our structures touch client relationships, appropriate consent is obtained. We work with counsel to determine consent requirements for each engagement.
Regulatory Filings
We account for necessary regulatory filings and approvals in our process. Our timeline expectations reflect the reality of working within regulated environments.
This overview is for informational purposes only. Each engagement is structured based on specific circumstances and reviewed by appropriate legal and compliance professionals. We do not provide legal, tax, or regulatory advice.