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In the 10 years since HighTower Advisors launched in Chicago, the wealth manager has amassed $46bn in client assets.
It is now present in 28 American states, with corporate offices in New York and San Francisco, and has more than 190 advisers. It has eight practices in this year’s FT 300 list.
Elliot Weissbluth, HighTower’s chief executive, founded the company to attract successful broker-dealers who were contemplating breaking free from wirehouses — full-service national brokerages that typically offer research, investment advice and place trades.
HighTower’s partnership model, where joiners are offered equity and cash, enabled it to attract advisers from the likes of Morgan Stanley, Merrill Lynch, UBS and Wells Fargo.
After leaving the big Wall Street institutions, many advisers found a more independent atmosphere at HighTower, says Kimberly Papedis, the company’s head of national sales and platform strategy who is based in Chicago. They were unencumbered by sales quotas and the pressure to sell proprietary products or specific third-party products. HighTower has no in-house products to sell to clients, removing some potential conflicts of interest. Almost all clients pay fees rather than commission.
HighTower provides its advisers with support for operations, compliance, technology, practice management, investment research and due diligence. Help is also at hand for marketing, public relations and other areas of the business.
As the company grew, it started to attract another category of advisers who wanted HighTower’s support but preferred to stay independent affiliates and pay for its services rather than become partners. Affiliated advisers retain control of their businesses and can often make more money compared with advisers who become partners and have an equity stake.
Signing up independent business owners has helped HighTower quadruple its client assets over the past four years, says Ms Papedis.
HighTower has 77 adviser teams — 25 are independent business owners and the rest are partners. One of HighTower’s independent business owners — the Ezzell-Conklin Group — and seven of its adviser partner teams — HighTower San Diego, HSW Advisors, the Bahnsen Group, the Lerner Group, the Sarian Group, Treasury Partners and VWG Wealth Management — made it to this year’s FT 300 list.
HighTower’s growth strategy is focused on attracting more independent business owners, which Ms Papedis says are its fastest growing adviser group. Around half the advisers HighTower is in talks with as potential partners are at wirehouses, while the rest are either independent business owners or independent advisers affiliated with broker-dealers.
Ms Papedis says HighTower aimed to make $35m in revenue from independent business owners joining the company as affiliates this year. She notes that HighTower achieved more than $29m of that full-year target by the end of May, but declines to disclose revenue targets for the entire business.
“Every adviser who comes into HighTower must fall in line with our founding principle,” Ms Papedis says. “Before we even meet advisers, we look at their compliance records . . . to determine if it’s even worth moving forward.”
From there, HighTower assesses the advisers’ investment processes, their methods for gaining new clients, their views and actions on fiduciary responsibility, as well as their goals for the growth of their practice.
Independent business owners that join HighTower pay a platform fee of 10 per cent to 17 per cent of their total annual revenue — the higher the revenue, the lower the percentage charged.
The next challenge for HighTower is to become a well-known national brand among investors, particularly those with more than $1m to invest, says Ms Papedis.