HighTower Advisors, a registered investment adviser in Chicago, has been on a hiring streak since its inception in December 2008, primarily targeting successful wire house reps with high-net-worth practices.
HighTower's setup gives independence-seeking wire house advisers an alternative to branching out on their own and selling their practices in 10 or 15 years, a West Coast recruiter says. High-Tower purchases wire house reps' practices, paying cash and granting an ownership stake in the firm.
HighTower is relatively small in terms of advisers — it currently consists of 12 teams of RIAs — but they're heavy hitters in terms of assets, weighing in at $16 billion. The West Coast recruiter says teams must manage a minimum $250 million of assets to show up on HighTower's radar.
The firm recently added two Morgan Stanley Smith Barney veterans — an adviser, Barnaby Levin, and an executive, Michael LaMena — to its ranks.
HighTower's chief executive, Elliot Weissbluth, says the teams have come from UBS, Merrill Lynch, Morgan Stanley and Smith Barney; Levin was a longtime Smith Barney rep before the firms combined. His three-adviser team brings $300 million to HighTower, and will serve the San Francisco and Palo Alto, Calif., markets.
LaMena, formerly executive director of private wealth management operations, joins HighTower as chief operating officer.
Weissbluth says HighTower does not target any one firm for new recruits. Its lineup of executives hails from UBS, Merrill Lynch, Goldman Sachs and Charles Schwab. In its current incarnation, Morgan Stanley Smith Barney "has seen some very fine firms folded into it over the years," making it a rich source of talent for HighTower.
However, Weissbluth says HighTower does not headhunt. Rather, it waits for advisers to decide on their own that they want to leave their firm. HighTower's hiring strategy is to make sure it's on the short list of places to go, he says.
Advisers keep control of their own businesses, from which they earn a living, but the West Coast recruiter says the big payout for advisers on HighTower's roster would come when the firm is eventually sold. Weissbluth says neither the firm nor its private-equity backers are in any hurry to sell, though. It just would not make sense to go to all the trouble of creating a small firm that allows advisers the freedom to run their businesses their way and then sell the entire firm to a wire house.
HighTower handpicked private investors who share the firm's ethos, Weissbluth says. So far, the firm has raised $165 million, part of which it plans to use to acquire advisers' businesses. In addition, advisers own 25% of the firm, which will eventually pay dividends and cash to its owners.