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Kovack Securities Acquires Small California Broker-Dealer

Kovack Securities Inc., an independent broker-dealer and registered investment adviser, has acquired the assets of TKG Financial, an independent broker-dealer and financial advisory firm based in Santa Barbara, California.

Founded in 1998, Kovack Securities serves approximately 400 independent financial advisors across the country who support mass affluent and high net worth retail investors, as well as company retirement plans on a fee and brokerage basis.

Under the terms of the agreement, all of TKG’s seven independent financial advisors, collectively supporting more than $200 million in client assets, are expected to transition to Kovack Securities and its RIA platform, Kovack Advisors.

TKG Financial will continue to be led by founding principal Keith Kelt and retain its current brand, management and offices in Santa Barbara. The firm will relinquish its broker-dealer status while remaining together as an independent branch, or Super-OSJ (Office of Supervisory Jurisdiction), of Kovack Securities.

“We’re excited to welcome Keith and his entire team under a structure that preserves everything TKG’s advisors love about their firm, without the regulatory and administrative burdens of being a broker-dealer,” said Brian Kovack, president and co-founder of Kovack Securities. “Smaller independent firms increasingly seek to eliminate rising broker-dealer costs while maintaining their unique brands and communities of like-minded advisors.” ,

Kovak added, ”We offer a unique path forward for smaller firms that want to stay together as distinctive Super-OSJ groups rather than get absorbed into a monolithic, large firm with thousands of advisors. In this landscape of accelerated industry consolidation, we’re confident our transaction with TKG is the first of multiple similar deals to come for Kovack Securities.”

In addition to the team of independent financial advisors that will join Kovack Securities as part of the asset purchase agreement, Kovak Securities noted that it also provides TKG Financial with a fully built-out presence in an area of California with one of the highest concentrations of retail investor wealth in the nation.

Kovack Securities said that the Greater Santa Barbara area continues to be a highly desirable market, as well as a strategic ‘jumping off point’ from which to further expand advisor recruiting activity on the West Coast.

“The founding partners of our firm all came from the wirehouse channel prior to launching TKG,” said Kelt. “When we made the decision to become a broker-dealer in 2005, we wanted to create a perfect blend of a wirehouse and independent culture, presenting ourselves as a true alternative to the rest of the industry.”

Kelt continued, “While our broader approach and vision remain unchanged, escalating broker-dealer regulatory complexities have motivated us to pursue this transaction so we can renew our focus on what we’ve always done best: Serving our clients.”

The financial terms of the transaction were not disclosed.

Kovack Securities is based in Fort Lauderdale, Florida, and operates in tandem with its affiliated registered investment adviser platform, Kovack Advisors. The firm supports approximately 400 affiliated independent financial advisors across the country.

TKG Financial was founded in 2001 and became a fully registered broker-dealer in 2005. TKG Financial and its advisors provide asset management, financial planning services, insurance services and investment advisory solutions to institutional, corporate and private clients.

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