A Morgan Stanley team with $150 million in client assets joined the breakaway independent movement, launching a hybrid RIA practice with Kestra Private Wealth Services.

Branch manager David Johnston and advisor K.C. Johnston opened White Cap Wealth Management under the subsidiary firm of Kestra Financial, the 13th largest independent broker-dealer, Kestra announced this week. The manager, a 36-year industry veteran, started the practice in Provo, Utah.

Kestra PWS is “in the midst of an explosive period of growth,” CEO Rob Bartenstein wrote in an email, noting the agreements reached this month are the most in the firm’s seven-year history.

Wirehouse advisors have been flocking to RIAs and other independents in recent years, according to a Cerulli Associates report released earlier this month. Steward Partners, an independent firm affiliated with Raymond James Financial Services, has attracted two Morgan Stanley teams in the past two weeks.

Kestra revenue chart

The move marks the second new Kestra PWS office launched this year, according to Bartenstein. The hybrid RIA firm has also secured commitments from six teams with 10 total advisors to open offices next year, says Bartenstein, himself a former Morgan Stanley and Merrill Lynch advisor.

The firm provides a range of services so advisors can tap into “our experience, capital and scale, and they ramp faster with reduced economic and business risk,” he added.

The Johnstons formally left Morgan Stanley for Kestra PWS on Aug. 10, according to FINRA BrokerCheck. A spokeswoman for Morgan Stanley confirmed their departure but had no further comment.

David Johnston had been with Morgan Stanley since 2009, while K.C. Johnston began his tenure there in 2014. The branch manager also worked for Citigroup for 15 years and spent nine years at Lehman Brothers.

White Cap also has a client service associate, Dan Finch. The team’s specialties include investment management, executive stock compensation consultation and employer 401(k) plans.

“When it came time to break free from the wirehouse environment, we wanted to partner with a firm that gave us all the tools, support, and guidance needed so we could focus on growing our practice," David Johnston said in a prepared statement. "Kestra PWS really delivered on that front."

Kestra PWS now has 12 offices, 31 advisors and $1.8 billion in brokerage and advisory assets, according to Bartenstein. All advisors at the firm, formerly called Washington Wealth Management, came from wirehouses, including a Wells Fargo team that opened an office in Carlsbad, California, earlier this year.

The Austin, Texas-based parent of Kestra PWS changed its name to Kestra Financial from NFP Advisor Services last year, after private equity firm Stone Point Capital purchased a majority stake from insurance brokerage NFP. Kestra itself acquired 600-advisor IBD H. Beck in August.

Kestra’s revenue ticked down 1% last year amid similar dropoffs throughout the IBD space. The firm’s revenue had previously grown four years in a row.

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