Austin-based Kestra Financial, a Kestra Holdings company with a couple of corporate RIAs and a broker/dealer overseeing $108 billion in collective assets, has added a New York City firm with more than $600 million in managed assets to its platform of affiliated advisors.
Borger Financial Services was created in 2003 by Managing Partner Elie Borger, a former corporate finance lawyer, and Debra Clark, a CFP with Series 7, 63 and 65 FINRA registrations. They made the move after 13 years with Hornor, Townsend & Kent, a hybrid platform managing close to $7 billion under its ADV. The five-person team, including CFP Michael Cooper, provides comprehensive financial planning services and investment management for around 200 clients, along with a menu of retail insurance products.
"We are now more comprehensive as a function of our affiliation with Kestra,” Borger told WealthManagement.com this week.
Speaking highly of HT&K, which is owned by Penn Mutual Life Insurance, Borger said the departure was on “excellent terms.” He cited Kestra’s organizational model, which he deemed “more nimble,” and a new partnership to increase access to alternative investments as key reasons behind the move.
“Affluent clients are looking beyond public equities and public fixed income for access to things like private credit and private equity, and Kestra has done an excellent job creating healthy access, with due diligence, to that market,” he explained. "And there’s a focus on an ensemble practice as an independent enterprise. Our partnership with Kestra has immediately supported the growth of our practice as an enterprise, as opposed to an individual book of business or even the ownership.”
The deal closed on Oct. 31, 2023, and BFS transitioned 100% of its clients to the new platform, growing assets by another 20% in the first three months, according to Borger, due partly to market appreciation.
Borger said BFS isn’t interested in adding more than 10 new clients a year but expressed enthusiasm about exploring inorganic opportunities and said the search is underway for a junior advisor.
“I would have no objection to acquiring the right practice tomorrow,” he said. “I welcome the opportunity, but it would have to be the right fit, someone who is similarly situated, who has done a good job for their clients and shares a similar philosophy.”
The Kestra Financial ecosystem currently supports more than 400 practices and 1,700 advisors, according to President Stephen Langlois. While geography isn’t a primary consideration, he said Kestra does prefer to work with larger, well-established teams.
“We like to focus on folks like Elie that run these very high-quality practices in that ensemble structure because we feel it provides the best solution for the end investors,” he said. “We’re more focused on firms that are planning-led and fee-oriented in their client service model than, necessarily, their book of business.”
Noting record recruitment in 2023, Langlois feels good about the 2024 pipeline.
“Our value proposition is resonating really well,” he said. “Whether it's firms going independent or firms who are already independent like Elie and looking for a more sophisticated platform to work with.”
Kestra is prioritizing the adoption and execution of its investments this year, according to Langlois, and expanding the new alternatives offering. That includes further development of a new in-house investment management and research service called Kestra Investment Management. Broadening the use of a new financial planning resource is also an area of focus, and another new partnership, yet to be announced, will make investment banking services available to small business owners.
"There’s always a bull market for financial advice,” said Langlois. “I love how Elie feels he is impacting far more lives doing what he’s doing in financial planning and investment management than he probably ever would have in corporate law. No disrespect to that, but it's a privilege to support people who do this great work.”
Kestra Financial has around $108 billion in client assets under advisement across all three entities, including $56 billion under management. The firm reported $720 million in revenue at the end of last year, or about 81.9% of the $879 million reported by parent company, Kestra Holdings, which is majority owned by Warburg Pincus and includes acquisition-focused RIA Bluespring Wealth Partners and Arden Trust Company. Across all entities, Kestra Holdings oversees $117 billion, including $66 billion under management.
In 2023, Kestra sold off subsidiary Grove Point Financial—along with about $15 billion in assets—to Atria Wealth Solutions.