Company Information
About Kestra Financial
Kestra Financial, Inc. is the parent company of Kestra Investment Services, LLC (Kestra IS) member FINRA/SIPC, Kestra Advisory Services, LLC (Kestra AS), Kestra Private Wealth Services, LLC (Kestra PWS), and Kestra Institutional Services, LLC. Kestra IS is a registered broker-dealer. Through our network of over 1800 independent registered representatives nationwide, we provide a variety of investment and insurance products and services to help meet the needs of our clients. We are a member of the Financial Industry Regulatory Authority (FINRA), and registered and qualified to do business in all fifty states. Registered representatives of Kestra IS may also act as investment adviser representatives, offering these service through either Kestra Advisory Services, LLC (Kestra AS), or Kestra Private Wealth Services, LLC (Kestra PWS). Both firms are federal registered investment advisers. Check the background of Kestra Financial on FINRA’s BrokerCheck.Privacy
The privacy of our clients' information is very important to us. Please see our Privacy Policy for information regarding our commitment to the protection of client information.
Kestra Financial Business Continuity Plan Disclosure
Kestra Financial is committed to providing timely service to our clients. This document is to inform you of our ability to respond to certain business disruptions. Kestra IS is an introducing broker/dealer and, as such, relies on correspondent clearing firms to perform certain functions on their behalf, including the execution of securities transactions and the maintenance of customer funds and securities. Kestra AS and Kestra PWS have similar relationships with 3rd party custodians and asset managers. Our ability to respond to certain business disruptions is partially dependent upon these firms.
We maintain a business continuity plan that includes backup facilities and arrangements at redundant data centers and alternate processing facilities to address interruptions to our normal course of business. The plan is reviewed annually, updated as necessary, and subject to modification from time to time. Any critical changes to the plan will be posted to this website and may also be requested in writing to Kestra Financial, Inc., 5707 Southwest Parkway, Bldg. 2, Ste. 400, Austin, Texas, 78735.
As described below, our plan outlines the actions the above named subsidiaries of Kestra Financial will take in the event of a single building or a citywide or regional incident. These actions include relocating technology and operational personnel to preassigned alternate locations as necessary. Although we intend to continue business in the event of a business disruption, there are some disruptions that may render us unable to continue business. Under such circumstances, we cannot guarantee that we will be able to follow our stated course of action. However, we will take steps designed to ensure that clients will be able to access their funds and securities within a reasonable time.
Response to Events of Varying Scope
The following sections describe specific events and the corresponding general response to such events from Kestra Financial.
Disruption to a Single Building or Firm-Only Business Disruption
These disruptions may be caused by physical damage, technology problems, or an inability to have personnel arrive at an office. In the event that there is a significant business disruption to a single building or our internal primary systems, we will, if necessary, transfer our operations or route incoming calls to an alternate geographic location. In this process, clients may experience a minor delay in reaching us due to increased client calls, technology delays, or other minor difficulties arising from the transfer of operations. In addition, if our clearing firms are affected by a single building or firm only business disruption, clients may experience additional delays.
Business-District, Citywide, or Regional Disruption
In the event that there is a significant business disruption that affects the business district, city, or region where any of our primary systems are located, we may, if necessary, transfer our operations or route incoming calls to another office in an alternate geographic location office. In this process, clients may experience a minor delay in reaching us due to increased client calls, technology delays, or other minor difficulties arising from the transfer of operations. If the disruption is significant, we may transfer our operations to a third party service provider. In addition, if our clearing firms are affected by a business district, citywide, or regional disruption, clients may experience additional delays.
Our operational facilities are equipped for resumption of business and are tested as necessary. Our anticipated recovery time from a business district or citywide disruption, including those involving a relocation of personnel or technology, is (4) hours. External conditions and circumstances beyond our control may negatively impact these recovery times and though we have plans in place, we cannot guarantee that we will be successful in achieving recovery in the times noted above. For example, we may not be able to implement a plan during a disaster as quickly as we expect, or there may be disasters that we have been unable to anticipate and for which we have no plan. Additionally, if parts of our plan are dependent upon third parties, we may have no control over the success or failure of the third party to respond appropriately to the challenges posed at the time of the disaster.
As our customer, you may have your accounts held at a clearing firm. It is important to note that should the business continuity our firm be interrupted and you find you are unable to get through to your representative, the following information is provided for those emergency situations. Please contact the custodian of record listed on your account statements.
National Financial Services, LLC Business Continuity Statement
As you may know, Kestra IS and National Financial Services LLC (NFS) have an agreement in which NFS may provide trade execution, clearing, and other related services for your brokerage account. In connection with these services, NFS is required to communicate its position on business continuity practices. At NFS, we recognize how heavily you and your broker/dealer rely on our systems and services. We also recognize that the unexpected can and does occur-from simple situations to major outages. NFS has successfully supported critical business activities during disruptions of normal business processes resulting from hurricanes, tornados, blizzards, and other natural and man-made disasters. NFS wants you to know that we have an extensive plan in place to safeguard your assets and protect vital account information in the event of a business disruption. The plan can be viewed at the following on the NFS website or they may be reached at 800-801-9942.
Bank Deposit Sweep Program
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Select Provider Relationships
We make available hundreds of different mutual fund and variable insurance products to our representatives and customers. We also make available many retirement vehicles such as 401(k) and group variable annuity products, as well as alternative investment products such as limited partnerships, real estate investment trusts, and hedge fund products. Our representatives are free to choose what products they sell to customers from among these many products. Because of the numerous investment and insurance alternatives available, Kestra IS and Kestra AS focus on the sale of products of a select number of providers ("Select Providers"). Select Providers are given increased access to our representatives and advisors for the purpose of providing marketing, education and product support.
Our list of Select Providers is available here.
Kestra IS and Kestra AS receive both financial and nonfinancial support from Select Providers. We receive more compensation for the sale of products of Select Providers than for the products of other providers we sell and thus have a financial incentive to sell the products of Select Providers. The amounts and forms of compensation we receive from Select Providers vary based on a number of factors including level of past sales, prospective future sales and the types of service and access to distribution we provide. We receive one or more of the forms of compensation described below in connection with our arrangements with each Select Provider.
These payments are made from the resources of the investment adviser or distributor (or one of their affiliates) in the case of mutual fund Select Providers, and from the resources of the insurance company (or its affiliate) in the case of variable annuities, group annuities, and variable life products. The payments typically are in addition to the sales charges, rule 12b-1 fees, redemption fees, deferred sales charges and other fees and charges you will find described in the prospectus fee tables or offering documents of the various products.
Mutual Funds and ETFs
Select providers of mutual funds and ETFs pay us or our affiliate either an amount up to 0.7% of assets under management, a percentage of the weighted average net expense ratio of our assets under management, or flat fees up to $225,000. Such providers may also pay us or our affiliates fixed fees of up to $60,000 annually to support and participate in various conferences and seminars conducted by us and our affiliate.
Variable and Registered Index-Linked Annuities
Select Providers of variable and registered index-linked annuities pay us or our affiliates an amount of up to 0.25% of the amount of our sales of their products quarterly. The total revenue derived from all variable, fixed indexed, registered index-linked, fee-based and defined income annuity sales will amount to at least $25,000 to us and our affiliates every year. Such providers may also pay us or our affiliates fixed fees of up to $75,000 annually to support education and participate in various conferences and seminars conducted by us and our affiliates.
Equity and Fixed Indexed Annuity Providers
Select providers of equity and fixed indexed annuities pay us or our affiliates an amount of up to 0.15% based on gross sales volume. The total revenue derived from all variable, fixed indexed, registered index-linked, fee-based and defined income annuity sales will amount to at least $25,000 to us and our affiliates every year. Such providers may also pay us or our affiliates fixed fees of up to $75,000 annually to support education and participate in various conferences and seminars conducted by us and our affiliates.
Fee-Based and Defined Income Annuities
Select Providers of fee-based and defined income annuities pay us or our affiliates an amount of up to 0.10% of the amount of our sales of their products quarterly. The total revenue derived from all variable, fixed indexed, registered index-linked, fee-based and defined income annuity sales will amount to at least $25,000 to us and our affiliates every year. Such providers may also pay us or our affiliates fixed fees of up to $45,000 annually to support education and participate in various conferences and seminars conducted by us and our affiliates.
Private Placement Insurance
Select Providers of private placement variable life and variable annuity products pay us or our affiliates an amount of up to 5% of the Select Provider’s net retained M&E on each relevant policy in proportion to Kestra’s relation/credit of sale of the policy. Such providers may also pay us or our affiliates fixed fees of up to $30,000 annually to support education and participate in various conferences and seminars conducted by us and our affiliates.
Retirement Products
Select Providers of 401(k), group variable annuity and other retirement products pay fixed fees for the benefit of us or our affiliate up to $125,000 annually to support and participate in conferences and seminars.
Alternative Investments
Select Providers of alternative investment products, including but not limited to, private equity, private credit, real estate, managed futures and hedge fund products, pay us or our affiliates an amount of up to 1.00% of new investments in such products Select Providers of alternative investment products will also pay us or our affiliates an amount of up to 0.25% of the assets under management. In addition, such providers pay us or our affiliate fixed fees of up to $75,000 annually to support education and participate in conferences and seminars. Select Providers of alternative investment products also pay us or our affiliates an initial fee of up to $5,000 and an annual fee of up to $1,500 to support the due diligence efforts of us or our affiliate related to such products and providers.
Variable Life Insurance
Select Providers of variable life insurance products may pay us or our affiliates wholesale overrides in an amount of up to approximately 31% of first year target premium and an amount of up to approximately 4% of any renewal premiums. Select Providers of variable life products also pay us or our affiliates up to $75,000 annually to support various workshops and meetings, to support the development of account management tools and other technology and to support our due diligence efforts. In the case of variable life insurance products, Select Providers provide a variety of policy and underwriting support services to Kestra IS, our affiliates and our financial advisors. We may pay our financial advisors a higher percentage of compensation for sales of Select Provider variable life insurance products than for other such products we sell.
Additional Information
For additional information regarding fees and compensation, you should refer to the prospectus and statement of additional information applicable to your investment.
Warburg Pincus, LLC
Affiliated funds of Warburg Pincus, LLC (“Warburg Pincus”) own a majority interest of the ultimate parent company of Kestra Advisory Services, LLC (“KAS”), Kestra Private Wealth Services, LLC (“KPWS”) and Kestra Investment Services, LLC (together with KAS and KPWS, “Kestra”). Kestra makes available investment funds affiliated with Warburg Pincus. The recommendation of such a fund creates a conflict of interest since the holder of a majority interest in Kestra’s ultimate parent company would directly or indirectly benefit from an investment in the fund.
In addition, an affiliate of Warburg Pincus owns a financial interest in the investment adviser to certain funds available through the alternative investment platform, iCapital, that Kestra uses to make such investments available. The recommendation of such a fund creates a conflict of interest since the holder of a majority interest in Kestra’s ultimate parent company, Warburg Pincus, would directly or indirectly benefit from an investment in the fund.
Clearing and Order Fulfillment Services
We utilize the services of other broker-dealers to execute or assist us to fill customer orders for the purchase and sale of securities. We may receive compensation from such broker dealers in connection with customer orders. NFS provides clearing services for Kestra IS and its customers, and Kestra IS, Kestra AS, and Kestra PWS may receive execution price discounts or other compensation from these companies.
In addition, pursuant to its clearing agreement with Kestra IS, NFS may remit shareholding servicing fees for money market mutual funds affiliated with NFS in amounts set forth in the prospectus or other offering document for such funds.
Kestra IS may utilize the services of Advisors Asset Management, Inc. (AAM) in connection with the purchase and sale of fixed income securities (bonds and other debt instruments). Kestra IS receives compensation from AAM as a percentage of the concessions AAM charges for fixed income security orders executed by AAM on behalf of Kestra IS.
Investor Education
FINRA and SEC make available information regarding investments, insurance and other financial services. Following are links to their investor education resources for your convenience. When you access these websites you are leaving our website.