Austin-based Kestra Financial, a Kestra Holdings company with several 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 assets under management on its affiliate advisor platform.
Borger Financial Services was established in 2003 by Managing Partner Elie Borger, a former corporate finance attorney, and Debra Clark, a CFP with FINRA Series 7, 63 and 65 registrations. They made the move after 13 years with Hornor, Townsend & Kent, a hybrid platform that manages approximately $7 billion under its ADV. The five-person team, including CFP Michael Cooper, provides comprehensive financial planning and investment management services to approximately 200 clients, along with a menu of retail insurance products.
“We are now more comprehensive as a function of our relationship with Kestra,” Borger said WealthManagement.com this week.
Speaking well 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 considered “more nimble,” and a new partnership to increase access to alternative investments as the main reasons behind the move.
“Affluent clients are looking beyond public equity and public fixed income for access to things like private credit and private equity, and Kestra has done a great job of creating healthy, due diligence access to that market, he explained. “And there is 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 a proprietorship.”
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, in part due to market valuation.
Borger said BFS is not interested in adding more than 10 new clients a year, but expressed enthusiasm for exploring inorganic opportunities and said a search is underway for a new adviser.
“I wouldn't mind getting proper practice tomorrow,” he said. “I welcome the opportunity, but it would have to be the right fit, someone who is in a similar position, who has done a good job for their clients and shares a similar philosophy.”
According to President Stephen Langlois, the Kestra Financial ecosystem currently supports more than 400 practices and 1,700 advisors. While geography is not a primary consideration, he said Kestra prefers to work with larger, well-established teams.
“We like to focus on people like Elie who lead these very high-quality practices in that ensemble structure because we think it provides the best solution for end investors,” he said. “We are more focused on firms that are schedule-driven and fee-oriented in their client service model than necessarily in their book of business.”
Noting record recruiting 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 that are already independent like Elie and looking for a more sophisticated platform to work with.”
Kestra prioritizes the adoption and realization of its investments this year, according to Langlois, and the expansion of the offer of new alternatives. This includes the further development of a new investment management and in-house research service called Kestra Investment Management. Expanding use of a new financial planning resource is also an area of focus, and another new, yet-to-be-announced partnership will make investment banking services available to small business owners.
“There's always a big market for financial advice,” Langlois said. “I love how Elie feels he's impacting a lot more lives doing what he's doing in financial planning and investment management than he probably ever would in corporate law. No disrespect to that, but it's a privilege to support the people who do this great work.”
Kestra Financial has approximately $108 billion in client assets under advisement across the 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 from Warburg Pincus and includes RIA Bluespring Wealth Partners and buyout-focused Arden Trust Company. Across all entities, Kestra Holdings oversees $117 billion, including $66 billion under management.
In 2023, Kestra sold subsidiary Grove Point Financial — along with about $15 billion in assets — to Atria Wealth Solutions.