Cerity Partners, a New York City-based hybrid wealth management firm overseeing close to $70 billion in advised and managed assets, has tapped a former vice chairman of KPMG’s tax practice to join as a partner and executive committee member.
In his new role as chief talent officer, effective as of July 31, Jeffrey LeSage is working to build out Cerity's tax practice across 40 offices in 15 states, in addition to leveraging longstanding industry relationships to attract talented wealth management professionals and contributing to international expansion initiatives.
LeSage spent 34 years with Big Four accounting firm KPMG before leaving in 2020 due to a policy expecting partners to retire at the age of 60. Under his leadership at the firm, KMPG increased tax revenue from $1.4 billion to $3 billion. LeSage has since held several consulting and coaching gigs and taken a seat on the board of Convalt Energy, a renewable energy corporation owned by ACO Investment Group.
The two had never met when Cerity CEO Kurt Miscinski reached out to LeSage on LinkedIn to convince him to return to work full time. Both, however, had spent part of their early careers with Arthur Andersen, a Big Five accounting firm before it was taken down in the 2001 Enron scandal.
“He saw that and the success we had at KPMG, so he reached out and came to visit me,” LeSage said.
“The opportunity in front of us is huge,” he said, noting Cerity has enjoyed a compound annual growth rate of around 31% since it was founded in 2009. “And the quality of the people that I’ve met is so impressive I joked with Kurt that I would have tried to recruit them while I was still with KPMG.
“Obviously, my role as a chief talent officer is going to be to help recruit a lot of those same great people from other places as well,” he said. “But yeah, the growth opportunities are significant, particularly if you can bring in some tax firms and then convert those clients to wealth management clients. That’s the long-term goal.”
LeSage said his plan is to grow Cerity’s tax practice from around 100 individuals to closer to 900 over the next five years through recruitment and acquisitions.
“I think that'd be very scalable and would provide us some bench strength and some real opportunities to grow,” he said.
“At this stage of my life, I just want to play whatever role they feel that I can help with and be part of a great team,” he added. “Whatever role they want me to play, I’m willing to jump in. We’ve talked about international expansion, which is really my background and an area where I can certainly help.”
Advisor Growth Strategies Principal Brandon Kawal called the hire "significant," saying LeSage brings credibility and demonstrates a commitment to the integration of wealth management and tax. A business management and transaction advisory firm based in Phoenix, AGS has worked with Cerity on past deals.
"This includes expanding internationally where deeper tax and wealth expertise is needed and firms like KPMG and their peers have a strong track record," he said. "This move will play well within the recruiting and M&A space because advisors will value depth and specialized expertise as they consider where to gain an advantage for their clients, and themselves. We expect to see more firms make significant hires like this to gain an edge in organic and inorganic growth."
John Orsini, director of wealth advisory services for MarshBerry, an investment bank focused on the insurance and wealth management industries, added it's clear Cerity sees the expansion of its in-house tax services as a way to attract and retain clients and advisors.
“As the wealth advisory market evolves, firms are carefully examining their business models and strategically evaluating how they deliver their unique value propositions to both retain and grow their client base, which has led some to acquire tax and accounting practices,” he noted. “However, this approach may not suit every firm, as some may find outsourcing these services to be a more suitable option, especially if they are concerned about straying too far from their core offerings.
“In fact, certain firms are opting to divest such functions due to the potential risks associated with margin pressures and potential impacts on their corporate culture,” he added.
With 29 offices in 15 states, Cerity employs close to 400 advisors offering a range of wealth management and family office services, as well as retirement plan consultation, to more than 11,600 individuals and families, business owners, executives, corporations and charities.
After private equity firm Genstar Capital took over a controlling stake in Cerity last October, the firm announced three acquisitions in the first three weeks of 2023 and has since added four more—for a total of more than $11.5 billion in acquired assets over the last eight months.