Pros
For those of us that love to solve complex problems in a fractal business model, with net-new, deeply impactful projects and initiatives occurring constantly, Kestra is a perfect bride. Kestra certainly isn't "realizing" it's scale, but more so realizing how much it's scaled and just beginning to make some pivots necessary to deal with it. The company, as it's portrayed by senior leadership, is a massive success and continues to be competitive in the independent BD/RIA space. If their recruiting continues to thrive, and its debt remains right-size, they'll easily survive even the worst of market swings. Holdings have almost doubled in ~3 years, and no matter what anyone's feelings about Kestra are, you cannot argue with those numbers. If you are a fiend for hard work, tremendously resilient, and want the opportunity to own parts of the company's business that may be above your pay grade and at the forward edge of your talent, put your helmet on and step into the arena. You will receive a militaristic business education here, to put it mildly. There are countless opportunities to work closely with cross functional teams and business partners - and make no mistake - you will become close to these people, personally and professionally. More than 5 of my colleagues have become, and will be, lifelong friends. Chronic, sustained chaos isn’t healthy, but I didn’t come here to eat kale and sing kumbaya.
Cons
Oh boy... *cracks knuckles* Kestra current state is such a delicious case study, Harvard MBA candidates would enthusiastically snort its compounded complexities off the surface of a dive bar toilet tank. There is very little overarching strategic vision to guide the business forward, and truthfully, that’s not totally the fault of the current leadership. The company has doubled down on acquisitions of other seasoned businesses to grow its product offering instead of deep diving into low-hanging fruit… Kestra Financial is hogtied to its poor technology, which continues to plague both internal and external users. The design and engineering decisions made by long-gone contributors have prepared a sacrificial altar for associates and leaders alike. The pay is sub-par across all channels, and when you have significant tech debt, you must rapidly recruit the savant-level developers that we all know are out there. Kestra hasn’t accepted this as a solution, and for what reason I still don’t know. Countless, $multi-million initiatives have fallen flat and instead of investing that capital into sustainable long-term fixes, Kestra has under hired, undercompensated, and undermanaged. Unfortunately, even if Kestra were able to locate, convince, hire, and salary these elite employees, they wouldn’t be able to retain them due to the culture, or lack thereof. The company refuses to reward the employees they underpay and overwork. Whereas weeklong client incentive trips are expertly hosted in luxury destinations, Kestra employees are granted two drink tickets at a trashy bar and event space connected to a movie theater from 4-7pm on a Wednesday night for the annual “Christmas Party”. There’s no artful way to say it: it’s a slap in the face. If you’re green to plan for the quarter, you’re rewarded with a burger… Employees attend annual employee anniversary lunches with the CEO and President, which are notorious for their tendency to turn aggressive and combatant without warning. No effort is made to engage the employees in a truly impactful way. There isn’t much I dislike more than a lack of integrity, and that’s what has become the norm at Kestra. Years where we triumphed in topline revenue and lapped our plan, the legendary “Sweep Accounts” robbed those that were looking forward to their well-earned bonuses. It may have been true, but no one paid the price for that gaffe and certainly no one apologized. The employees do not trust upper management or decision makers. The only healthy culture that exists is only because of the love and appreciation shown by those who carry the banner, not for the company, but for those who truly care about our team. It’s a terribly toxic soup, and Kestra’s employees are A-grade ingredients stuck in a rolling boil. The only thing Kestra cares about is shareholder value. Seasoned, valued executives survive personal hells of interpersonal demoralization and degradation from top leadership in the hope they can make it until the next recap. The downstream effects of these unacceptable behaviors are severe and paralyze leaders in a devastating domino effect. The size of the internal shareholder group at the company is miniscule. You will not get equity if you join. But don’t get it twisted, being an outsider to this small group of equity holders does not shelter you from degradation. The CEO is a once-in-a-generation M&A and corporate finance genius – honestly, when it comes to balancing interests between capital partners/shareholders, creditors, and market risks, the guy is a blue genie. His struggles to relate, edify, and celebrate the people who care about his life’s work as much as he does is a monumental disappointment. His disposition is characterological. There is no true marketable differentiation between Kestra and its competitors, and therefore the satisfaction and retention of clients is the only thing that matters, regardless of how farfetched or absurd an escalation or complaint may be. The ability to call the President or Chiefs at any moment for any reason is the only real perk Kestra can offer, but it diminishes the client service model’s effectiveness and renders Kestra helpless to hold the professionals they serve accountable for operating high-quality businesses. True scale is futile.
