The Chicago roll-up cites improprieties by its partner-employees but recruiters find the timing interesting as the team was actively seeking an exit

July 16, 2016 — 12:05 AM UTC by Brooke Southall

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Brooke’s Note: Virtually all of the new deals that HighTower is publicizing in 2016 are related to its purchase of RIAs. Its subtractions of advisors are from the employee side of its business. That much we know for sure. The details of the PagnatoKarp departure are still dribbling out. See: After chats with Phyllis Borzi, a flagship HighTower team executes a 'deliberate’ breakaway to form a $2.5-billion RIA. This Amidei team case, more openly adversarial, has almost the same net effect — one fewer HighTower “partner.” Where the assets end up, nobody knows. Brian Amidei, who spoke briefly with me, says he may have more to share in a week. What jumped out at me when I went back and read our original June 2011 article about HighTower and Amidei was how they got married in the first place. Both sides spoke of how it came about in record time — a sort of love conquering all in a business context. Of course, there are risks for both parties in toeing the edge of urgency and haste.

After a shotgun marriage five years ago, HighTower Advisors LLC and Brian Amidei have gotten a shotgun divorce.

The Chicago-based aggregator split with the Palm Desert, Calif.-based financial advisor — a former bond trader, Merrill Lynch stockbroker and gas station owner — and his team, whose assets were counted at $375 million at the time they left Merrill Lynch in 2011. See: HighTower is starting to run the poaching table in Palm Desert.

The firing was first reported Friday in AdvisorHub. Amidei confirmed his departure to RIABiz when reached on his cell phone that afternoon.

“It came as quite a shock,” he said.

Despite being fired by HighTower, Amidei vows that he and his team aren’t going anywhere — though he declined to say whether he’ll become an RIA or join another broker-dealer as an employee.

“We’ll still be in the business. We will still service our client needs.”

Schwab role?

HighTower alleges that Amidei’s team “allegedly altered client account codes to obtain credit for client revenue from another team working in the same office,” according to the AdvisorHub article, which cited people familiar with the accusations as sources.

The principal custodian for this team’s assets, San Francisco-based Schwab Advisor Services, declined to respond to an email asking whether the company would side with HighTower or the advisor in this case. HighTower has all its advisors under its corporate RIA.

A recruiter reached for this article expressed skepticism about HighTower’s allegation, noting that any advisor knows that such an action would generate a paper trail that would almost assure them getting caught.

Adding to that skepticism, according the recruiter and an industry observer, is that “multiple sources” say that Amidei has been looking for a new home for his team for as long as two years. Amidei told AdvisorHub he’s been trying to negotiate his HighTower exit since 2015. Amidei declined to comment to RIABiz on this exit matter other than to say he took no issue with the AdvisorHub article.

HighTower has been under pressure since PagnatoKarp — a 25-person team and its $2.5 billion in assets — broke away last month to form a standalone RIA. See: After chats with Phyllis Borzi, a flagship HighTower team executes a 'deliberate’ breakaway to form a $2.5-billion RIA.

Hightower currently oversees $24.6 billion in assets and has a total of 426 employees who serve 10,000 clients, according to its latest ADV.

'Blatant violations’

HighTower contends that the allegations against Amidei’s team are airtight. Matthew Henneman, an attorney representing HighTower, told AdvisorHub that the investigation was “thorough.”

“These actions were blatant violations of firm policy and resulted in his termination for cause,” Henneman, an attorney with Watt Thompson & Henneman LLP of Houston, wrote in a statement to AdvisorHub.

No client accounts were affected, Henneman added.

A HighTower spokeswoman responded to a request for comment by asking if RIABiz had the response from the attorney. When a reporter responded by saying they had the response as far as AdvisorHub had quoted it, there was no further response from the HighTower spokeswoman.

When he joined HighTower in April 2011, Amidei, a native Chicagoan, said he felt like he was, in a sense, coming home. He also noted that it took only 78 days from first contact to signing on the dotted line. Such was the urgent nature of the move that HighTower had not even procured permanent office space for Amidei when the deal was formalized.

Although a broker can become an RIA in a week if sorely pressed, realistically the fastest transition takes about 60 days, said John Furey, principal of Phoenix-based Advisor Growth Strategies, in 2009. See Furey’s column: The transition process is still too rough for gusher of breakaway advisors.

Desert call

In addition to the Chicago connection, Amidei liked HighTower’s back-office capabilities. HighTower was founded in 2008. See: HighTower extends its winning streak of luring breakaways near the nation’s capital.

Indeed, the sales process was unusually smooth, according to Mike Papedis, managing director and head of business development for HighTower. “They called and left a voicemail: 'It’s time to talk. Let me know when you’re coming to the desert,’” he told RIABiz in 2011.

When Papedis got the voicemail from Amidei, he wasted no time booking westbound flights for himself and his boss, HighTower CEO Elliot Weissbluth. Kevin Geary, also on the business development staff, came down from San Francisco. See: HighTower hires top recruiters from Schwab and LPL to help populate five new offices.

“It’s absolutely unbelievable,” Amidei said then. In 2011, his team managed about $375 million for about 125 clients — many of them ultra-affluent retirees aged 55 or older.

Amidei’s team was the 21st to sign on with HighTower. See: HighTower adds an existing RIA and two big UBS producers to a burgeoning Silicon Valley office.

Clandestine meeting

Amidei, now 52, told RIABiz at the time that he was aware of the $30 million to $40 million of new assets that would come to him as a result of his move to HighTower Advisors, which was then an aggregator of 21 teams with $18 billion or more of assets.

Amidei has an unusual origin story: He started out with four Amoco gas stations in the Chicago area that were part of a family business. He sold them in 1993 and used the proceeds to buy a seat on the Chicago Board of Trade, from which he traded municipal bonds and U.S. Treasury bond futures with his own money. Amidei used his moderate success as a trader to help float his brother’s restaurant. Eventually, Amidei sold the restaurant and the board seat.

HighTower executives met with the three partners for four-and-a-half hours in a meeting room of Morningside Country Club in Palm Desert and all-but wrapped up a deal.

“It just felt right. These were high-quality people. We just left with a lot of momentum behind it,” Papedis said in the 2011 interview.

Amidei holds client dinners and rents a skybox for local events like the Bob Hope Chrysler Classic and the BNP Paribas Open.


Mentioned in this article:

Advisor Growth Strategies, LLC
Consulting Firm
Top Executive: John Furey



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