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Three Shades of HighTower

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Since opening its doors in 2008, HighTower Advisors, a Chicago-based hybrid broker/dealer and registered investment advisor, has grown at a nice clip under its philosophy of “promoting choice at every level.” In fact, the firm was on our list of the top 10 fastest-growing RIAs, with a three-year annual growth rate of 119 percent.

But lately the firm has been even more aggressive in attracting breakaways by launching two new channel offerings: HighTower Network and HighTower Alliance. The firm currently has 37 teams and 81 advisors within its HighTower Partnership program, where advisors are employees of HighTower, own the P&L, have equity ownership in the firm and maintain full control of their practice.

During a recent meeting with WealthManagement.com in Chicago, Michael Papedis, executive vice president, said the firm has commitments from two teams to join the Network, where advisors operate as independent contractors under the HighTower brand and own 100 percent of their business. They’re also responsible for business expenses.

Meanwhile, the HighTower Alliance model is geared towards advisors who want a stand-alone RIA with their own branding. Advisors can use the firm’s broker/dealer, capital markets and trade services.   

But Papedis says the firm’s ideal advisor profile has not changed; with the new models, the firm is continuing to focus on its bread and butter—top caliber wirehouse advisors who have outgrown Wall Street and have a fiduciary mindset. The RIA-only model is a crowded space, Papedis said.

That said, the firm is starting to go after advisors who have already gone independent through its Alliance program.  A lot of advisors who are less than two years out from breaking away are realizing that running an RIA is not all it’s cracked up to be, Papedis said. Instead, the principals are spending all their time running the business, rather than meeting with clients.

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