HighTower back in the market

After 4Q hiatus, firm adds Philly-area team managing $650M in assets

Feb 24, 2013 @ 12:01 am

By Andrew Osterland

+ Zoom

After a fourth-quarter hiatus from adding new adviser teams, HighTower Advisors LLC is back in the market.

The private-equity-backed partnership of advisory practices last Tuesday announced the addition of its largest team of advisers in the past six months, signing on the Sarian Group — a pair of Bank of America Merrill Lynch advisers managing $650 million in assets. Located in Wayne, Pa., amid a high concentration of pharmaceutical and health sciences companies, Sarian serves a substantial number of high-net-worth executives in those industries.

“It's a significant part of our practice,” said Greg Sarian, a 20-year veteran at Merrill and one of the Barron's Top 1000 Advisors for the past three years. “Many of our clients have equity ownership and enter transactions with a lot of tax- and estate-planning considerations. We bring them tactical financial planning.”

DISMAL ENVIRONMENT

By most recruiters' accounts, the environment for moving wirehouse advisers to new companies has been dismal of late. HighTower, for one, chose not to bring on any new advisers in the fourth quarter in order to focus on helping advisers recruited earlier in the year with the transition to the firm.

“We're a growth company on-boarding teams with great frequency,” said Mike Papedis, executive vice president of business development for HighTower. “Last year, the management team decided we would use the fourth quarter to focus on servicing advisers we brought on earlier in the year. That's going to be our plan going forward.”

Mindy Diamond, the recruiter who placed the Sarian Group with HighTower, has seen a pickup in interest from advisers this year and expects a more active market in the coming months. Another year has been peeled off the retention packages many wirehouse advisers received after the financial crisis, and the examples of teams such as Sarian making the move to independence likely will give other advisers confidence to do the same, she suggested.

“The power of independence fuels itself,” Ms. Diamond said. “The more people like Greg Sarian move, the more it galvanizes the space.”

Mr. Sarian said he and his partner, Francis Masse II, started considering their options early last year, meeting with two other wirehouses and several independent firms before deciding on HighTower.

“We felt HighTower offered large-company resources with the autonomy and independence of a smaller, independent firm,” Mr. Sarian said.

This is the third lift-out of wirehouse advisers for HighTower this year, and the ninth in the last 12 months. The company now has 36 adviser teams in the partnership and manages more than $20 billion in assets, according to Mr. Papedis.

Merrill spokesman Matt Card confirmed the departure of the team but had no further comment.

HighTower's success has come from buying the practices of high-end advisers, but it is now hoping to attract a wider range of advisers looking for more-independent relationships, as well. Last year, the firm launched the HighTower Network and HighTower Alliance relationship models, which offer greater autonomy and payouts to advisers, and less operational and marketing support. The firm has yet to sign on any advisers to the Network or Alliance models.

“We now offer three levels of relationship. We're the omni-channel for all brokers leaving the wirehouses,” said Elliot Weissbluth, chief executive of HighTower. “We now cover the waterfront of choices for advisers.”

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