All of HighTower's existing partners have a say in accepting newcomers. "There's no formal voting," he explains, "but we give a cross-section of our partners the opportunity to interact with teams we're considering. We want to be sure advisors will be collaborative."
TRIPLE PLAY
Recently, HighTower expanded beyond the partnership format, rolling out two new options for advisors: the HighTower Network and the HighTower Alliance. "Both are designed for advisors who want to own their practice," Weissbluth says.
In the HighTower Network, advisors affiliate with HighTower's Form ADV filing, relying upon the firm for risk analysis and compliance oversight so that they won't have to hire their own staff in those areas. "Trading activity outside of our ADV will be prohibited," Weissbluth says. Network advisors generally will retain 80% of top-line revenues and turn over the balance to HighTower.
While HighTower Network advisors use the firm brand, that won't be the case with Alliance members. "They'll have their own ADV," Weissbluth says, "and be responsible for their own compliance." For HighTower Alliance members, the revenue split will be 90-10. Both Alliance and Network members will have access to HighTower services like research, capital markets opportunities and broker-dealer operations.
Mike Papedis, HighTower's executive vice president of business development, mentions a "continuum of independence" when describing the new ventures. HighTower can work with advisors who want to own their businesses as well as those who prefer entering into partnerships, he says.
Of course, as Aite's Pirker notes, "The High-Tower model is not for every advisor." Throughout the industry, there are many other RIA aggregators.
Omaha, Neb., wealth manager Ron Carson just started Carson Institutional Advisory to serve independent RIAs. Other firms, including Dynasty Financial Partners, Focus Financial Partners and United Capital Financial Advisers, are also eager to work with top advisors.
The bottom line, Pirker says, is that HighTower occupies a "good place" in a growing market. "The people there are really trying to build a firm with strength in the front and back office," he says. "They're focused on the operational side, realizing that's one reason a wirehouse can be more efficient than RIAs."
Donald Jay Korn, a contributing writer for Financial Planning, also writes regularly for On Wall Street.
