HighTower Advisors, one of the fastest-growing registered investment adviser aggregator firms in the country, said that it will offer two new paths for financial advisers to make the transition to independence.
The HighTower Network will give advisers who want out of wirehouses access to HighTower's brand, technology, investment platform and broker-dealer services, while leaving them the option of managing their own staff and handling day-to-day operations.
The HighTower Alliance will offer even more autonomy by allowing wirehouse advisers or independent advisers to launch or keep their own brand but have access to HighTower's investment platform and broker-dealer services.
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Financial advisers who join either new business line will receive payouts in the range of 80% to 90% of revenue, as opposed to HighTower partners, who work under a shared earnings model. They also will shoulder more of the costs of running their businesses.
“We've now covered the waterfront, and any adviser can join us,” Elliot Weissbluth, chief executive of HighTower, said at the MarketCounsel conference in Las Vegas this month, noting that alliance members would still be in charge of their own fate and could sell their practices to an outside entity.
Shirl Penney, chief executive of Dynasty Financial Partners LLC, a platform-services provider for advisers, said he considered his rival's move an affirmation of Dynasty's strategy.
“It's a brilliant move, and we think it validates our business model,” said Mr. Penney during a panel discussion with Mr. Weissbluth and Rudy Adolf, head of Focus Financial Partners, at the MarketCounsel conference two weeks ago.
Mike Papedis, executive vice president of business development for HighTower, said that advisers prompted the move.
“Many advisers in our pipeline expressed a desire to be more autonomous,” he said. “The movement to independence is gaining momentum, and the launch of these two new business lines supports financial advisers no matter their choice of the route to independence.”
The new business lines likely will lead HighTower and Dynasty to vie for the chance to add adviser firms to their stables, Mr. Penney said.
“To this point, we've rarely competed for the same advisers,” he said. “I suspect we'll run into HighTower more frequently going forward.”
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