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Royal Alliance loses $150M team to Kestra over service problems

Kestra Financial grabbed a Royal Alliance Associates team after impersonal service from their broker-dealer of nearly three decades left them “feeling very disconnected,” the practice’s owner says.

The team selected Kestra after considering 10 IBDs and homing in on three contenders, according to Sharla Rountree of Personal Benefit Financial, which was launched in 1977 by L. Ronald Blair. It now has five advisors managing nearly $150 million in client assets, Rountree notes.

Kestra Financial revenue

Personal Benefit’s move, announced Sept. 17, marks at least the second team this year to jump between the two similarly-sized firms with private equity backing. Royal Alliance, an Advisor Group subsidiary, is the No. 12 IBD, while Kestra is No. 14, according to Financial Planning’s FP50 survey.

Sharla Rountree, Kestra

Royal Alliance did retain two advisors from Personal Benefit’s office of supervisory jurisdiction, Rountree notes. The practice connected well with their local manager at Royal Alliance, but they received “watered-down” and impersonal assistance from Advisor Group’s consolidated service center, she says.

“I just grew increasingly dissatisfied with that type of service. We pay the broker-dealers, and I expect a certain type of relationship,” Rountree says. “We really are looking for that higher-touch relationship that we provide to our clients, and that’s the direction that we went with Kestra.”

Representatives for Royal Alliance parent Advisor Group said the firm had no comment on the team’s departure. The firm, Advisor Group’s largest IBD, would add some 1,800 advisors later this year under the Lightyear Capital-backed network’s June agreement to buy No. 16 IBD Signator Investors.

Personal Benefit represents the 27th new team to join Austin, Texas-based Kestra this year, according to the IBD, which is majority owned by Stone Point Capital and acquired No. 38 IBD H. Beck last December. H. Beck remains an independent subsidiary of Kestra rather than folding into the larger IBD’s brand.

Firms’ head counts show how they’re responding to a challenging time in which experts predict the number of advisors to fall in coming years.
September 17

Lakewood, Colorado-based Personal Benefit is making a custodial switch from Pershing to Fidelity’s National Financial Services, but it will keep its RIA while joining Kestra’s corporate RIA platform.

Kestra is “passionate about partnering with progressive wealth management firms” like Personal Benefit, Daniel Schwamb, the firm’s senior vice president of business development, said in a statement.

“We proudly welcome their experienced team of advisors and look forward to providing state-of-the-art technology, personalized consultation, and practice management support to help Personal Benefit Financial offer an exceptional client experience,” he said.

In addition to Rountree and Blair, the Denver-area practice includes three other advisors, she says. The pair had spent a combined 55 years with Royal Alliance before they affiliated with Kestra on Aug. 27, FINRA BrokerCheck shows, and Rountree calls it “a hard decision” to leave.

The practice’s clients are largely middle-class or upper-middle class, with a niche of federal employees and mom-and-pop small businesses. Kestra stood out from other suitors because its service center is more hands-on and designed for each practice’s specific needs, she says.

“It was a super-big challenge to commit to making a change,” Rountree says, praising Kestra’s resources and training for incoming advisors. “We feel like our hand is being held the whole way.”

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