Kestra Unit Recruits Some UBS Vets to an RIA Platform
Three UBS Wealth Management Americas veterans in Rhode Island have set up an independent shop with a registered investment advisory unit of Kestra Financial that focuses on transitioning full-service brokers.
Jeffrey Boudjouk, Anthony Landi, and Deborah Shuster had been managing about $340 million of customer assets at UBS, according to Kestra Private Wealth Services, which offers its own RIA to advisors as well as brokerage services through Kestra Financial.
Shuster, who had been with UBS for the last 12 years of her 37-year brokerage career is a partner of the new firm, Northeast Investment Group in Cranston. Boudjouk and Landi, who joined UBS in 2007 after nine and eight years, respectively, with Morgan Stanley, are managing partners.
Boudjouk was terminated by UBS in December for failing to timely disclose his participation in a client litigation in which he was deposed, according to his BrokerCheck record, while his partners left at the end of May when the brokers registered with Kestra.
Kestra Private Wealth focuses on selling its services to full-service, primarily wirehouse advisors who want more support than traditional independent brokers, a strategy that has been a mixed blessing since UBS and Morgan Stanley left the Protocol for Broker Recruiting late last year, said Kestra PWS Chief Executive Rob Bartenstein.
“The moves out have been kind of invigorating because they highlight the philosophical differences between the advisors’ perception of their relationship of the client and the wirehouse’s perception [of who owns] the relationship,” he said. “Our pipeline as it relates to those two firms has stayed the same or slightly increased, but from a practical standpoint it has worked for them, because we do move more slowly” to review contracts and consult with lawyers.
Kestra PWS works with 48 advisors in 17 independent offices who produce around $650,000 and have customer assets under management ranging from $80 million to the new team’s $340 million, said Bartenstein. It generally offers affiliated advisors payouts of 70%-80%, lower than the closer-to-90% of traditional independent brokerage platforms, because it covers more real estate and other support costs than independent firms, he said.
The PWS unit works closely with Austin-based Kestra Financial, which offers its own corporate RIA along with broker-dealer services, but generally attracts advisors averaged around $450 million.
Even when recruiting from firms still in the Protocol, which permits brokers to bring a limited amount of customer-contact information with them when they move, independent firms must tread carefully. Wells Fargo Advisors two weeks ago sued a team in Paramus, New Jersey that joined Kestra PWS, alleging that they took client information that exceeded terms of the Protocol and that violated federal and state laws. It also filed an arbitration complaint with Finra.
A federal judge denied Wells’ request for an immediate restraining order but has ordered the advisors, who operate as Liberty Wealth Solutions, to respond by the end of next week to Wells’ request for a preliminary injunction. Bartenstein said he could not immediately comment on the litigation.
Kestra Private Wealth was formed in July 2016 as a successor firm to Washington Wealth Management, which reorganized after selling a majority interest of itself to Stone Point Capital. Tony Sirianni, the publisher of AdvisorHub, was a founder of Washington Wealth.