A private equity-backed wealth manager that has five different businesses serving more than 2,400 financial advisors has hired its first chief investment officer to lead a new division.
Austin, Texas-based Kestra Holdings owns two broker-dealers, an RIA M&A arm, a wirehouse breakaway firm and a trust company spanning $122 billion in assets under administration. To lead the
Murphy, Kestra’s CIO, will build the division from scratch as its first employee. She plans to begin by rolling out “deep, grounded economic and market research” for advisors before launching new portfolio management tools such as outsourced modeling, she said in an interview. Wealth managers like Kestra and rivals like LPL Financial are
“The firm has really been growing by thinking about how else we can serve financial professionals,” she says. “It’s an area where we think we can really deepen the value proposition that we offer financial professionals, so that they can in turn deepen the value proposition that they offer clients.”
Representatives for Goldman Sachs, which
She had joined the firm a year earlier after more than two decades in the industry. Prior to her role at United, Murphy oversaw 100% asset growth in her tenure as CIO at AIG Funds.
“Hiring someone with Kara’s investment acumen, experience, and skill set for this pivotal new role creates tremendous value for our platform and financial professionals,” Kestra CEO James Poer said in a statement.
Earlier this year, Poer said the firm planned to bulk up
Independent wealth managers have traditionally struggled to compete with wirehouses when it comes to outsourced investment services like separately and unified managed accounts, other than a few firms that can meet the same pricing as Morgan Stanley and Merrill Lynch, according to recruiter Jon Henschen of Henschen & Associates.
When it comes to portfolio management by the corporate office rather than on their own or through other third parties, advisors tend to fall into “two camps, with one being, ‘I can hand this task off to the broker-dealer to do for me at a cost,’” Henschen said in an email.
“There are advisors that want to free up their time and would delegate these tasks to others that would find this attractive,” he says. “Advisors that are conscious of upholding a fiduciary standard and want to avoid any potential conflicts of interest may or may not find this to be a potential conflict and would avoid anything that enters into the realm of ‘proprietary.’”
The new outsourced services represent one area where Kestra is following its competitors rather than the other way around. Firms like LPL that launched their own wirehouse breakaway channels years after Kestra’s have already shown success with their own modeling tools: LPL’s nearly 18,000 advisors have
As part of its ramping of portfolio management and asset allocation tools, Kestra will eventually offer advisors its own models as well, according to Murphy. Since they’ll be a new service, Murphy is aiming to ensure they’re well-integrated into Kestra’s existing support teams for advisors, as well as its technology desktop and tax strategies.
The firm wants to be certain, “as we build out this investment focused effort, that we're really working hand in hand” across the entire firm, Murphy says. “An investment portfolio is so much more powerful when it's embedded in a financial plan.”
