HighTower debuts fee-for-service platform for independent wealth managers after signing its first client, an advisory firm with $19.9 billion under advisement.
HighTower plans to launch a fee-for-service platform for independent wealth managers on Wednesday after signing its first client, an advisory firm that is looking to emulate the aggregator's trademark partnership model.
Gavion Investment Counseling, a Memphis-based institutional investment adviser with $19.9 billion under advisement, will use the new HighTower Alliance to back its own new partnership for breakaway advisers, executives from both firms told InvestmentNews.
“We effectively offer just about everything they need to get into business and rapidly grow and compete,” said Elliot S. Weissbluth, HighTower's chief executive, referring to accounting, compliance and operations support as well as investment and brokerage services.
“They have profound destiny control compared to being an employee of any of these firms,” Mr. Weissbluth, referring to Wall Street firms. “We're not only competitive, we're superior.”
The launch of HighTower Alliance, first announced by Mr. Weissbluth in September 2012, signals a new emphasis for the Chicago-based “hybrid” advisory-brokerage firm, which started as a partnership built mostly of expatriated brokers from firms such as Morgan Stanley, Bank of America Merrill Lynch and UBS Wealth Management Americas.
Gavion wants to leverage its membership in Alliance as it seeks to attract top advisers — mainly those who manage more than $200 million and draw $2 million in annual revenue — in the Southern and Southeastern U.S.
Meanwhile, HighTower is emphasizing its new channels, such as Alliance, as it looks to capture the business of more than the advisers who join the partnership.
The Alliance model is often compared to Dynasty Financial Partners, which offers high-grossing independent firms access to a host of third-party services for a fee, acting more like a vendor than an investor, a category that includes HighTower's original partnership model, HighTower Advisors.
Mr. Weissbluth has said he didn't know if his firm's Alliance offering is comparable to Dynasty's.
But the business development chief for Gavion's new partnership model, Bobby Allison, invited comparisons of his firm's model to HighTower Advisors. Nonetheless, he said he did not expect to be competing with HighTower for advisers because of the firm's regional focus.
“We know our market down here, we're not going to be running around in Minneapolis and New York, and I don't think he's going to be running around down here,” said Mr. Allison, who has more than four decades of experience in operations at financial services firms, including Merrill Lynch and E. F. Hutton & Co. “We will be going after the corner-office guys at these major firms — a lot of these people we've known for a long time.”
In addition to HighTower Alliance and the partnership, whose advisers manage more than $12 billion, HighTower has an independent-contractor channel called HighTower Network. HighTower did not provide fee levels for its Alliance channel.
