A famous loyalist, Jim Pupillo crusaded for years to bring about change internally at Smith Barney before finally defecting

January 24, 2012 — 5:52 AM UTC by Brooke Southall


Brooke’s Note: The first time I interviewed Jim Pupillo was in 2004 after a top committee of the Association of Professional Investment Consultants met in Bachelor’s Gulch, Colo. He did not speak to me as a Smith Barney advisor because the wirehouse would not allow that. He spoke to me as a member of the consultants association, a group of Smith Barney advisors convening independently of the wirehouse. Its members were largely bent on eliminating all conflicts of interest within the company. When I heard his name again yesterday, I realized that he must finally have decided that the non-wirehouse world was better for serving his clients in spite of his efforts through APIC.

HighTower Advisors LLC has tapped a rich new vein of talent and assets with its recruitment of James Pupillo — a recognized leader of Morgan Stanley Smith Barney LLC’s elite Graystone Consulting unit. Graystone has 42 teams in 42 offices across the United States with 123 advisors. It has $151 billion of assets, though those assets include some senior institutional consultants at MSSB who do not have “Graystone” on their business cards.

Pupillo joined HighTower on Jan. 20 as managing director and partner and represents the company’s first branch office in the Southwest. He is based in Scottsdale, Ariz. and Barron’s lists his team as having $2.6 billion of assets under advisement. See: HighTower is starting to run the poaching table in Palm Desert.

Heavy blow

Stephen Winks, principal of Sr. Consultant in Richmond, Va. says that Pupillo’s departure could have significant reverberations for his former employer.

“Jim Pupillo is the canary in the mine for MSSB. Extremely loyal, very capable. He is in a awkward position of choosing to act in the client’s best interest or MSSB’s, which has grated on everyone in the Graystone group. Jim is highly regarded and has significant influence. Just as other very capable Smith Barney [E.F. Hutton Co.] Consulting Group brokers like Lori Van Dusen and George Dunn and others have found very happy places to practice with far fewer impediments to overcome. The implications of APIC — 10% of MSSB assets — being underserved, is profound if MSSB cares.” See: Dynasty Financial wins the account of Lori Van Dusen’s new RIA through Focus Financial

Barron’s has named Pupillo to its list of Top 100 Advisors every year since 2006. In 2009, he was recognized as the No. 1 advisor in Arizona.

Pupillo is joined in the breakaway by directors and partners Brian Hein and David Brasfield. Hein focuses on corporate benefit plans, serving for-profit and not-for-profit organizations. Brasfield’s specialty includes serving the complex financial planning needs of wealthy families. In addition, three support staff members are coming over to HighTower.

“I looked at several vendor platforms to support us if we went completely independent, but none provided anything close to the comprehensive platform at HighTower,” Pupillo said in a release. “We joined HighTower because it represents the very best-of-breed solutions, supporting sophisticated independent advisors and harnessing the competitive power of Wall Street for the benefit of our clients.”


Mike Papedis, executive vice president of business development at HighTower says that Pupillo did a full year of due diligence on his Chicago-based firm.

Pupillo declined to be interviewed but Winks believes there is a fundamental reason for his departure.

“For the industry’s most capable top advisors at our largest firms who actually do the necessary ongoing work to acknowledge their fiduciary standing, it is self-defeating to work in a brokerage format, even if they are allowed by exception to act in a fiduciary capacity. The firm does not provide the necessary enabling resources, which would be counter to the firm’s compliance protocol that brokers do not provide advice.”

Though MSSB did not directly address the issue of fiduciary standing, spokeswoman Christine Pollak makes it clear that her company is serious about supporting its consultants.

“Graystone is the largest institutional consulting business in the wirehouse channel and one of the biggest in the country,” she says. “We are fully committed to this business.”

She added that the consulting business had five new teams join its ranks in 2011.

Papedis says that indeed his company is indeed upping its focus on advisors who serve institutions as well as wealthy individuals. “You’re definitely seeing some trend lines here,” he says.

HighTower’s first institutional-minded team was Pagnato Karp. See: Fearless Merrill Lynch team breaks away with $1 billion in broad daylight.

Both of these teams joined in 2011.

Yet this one really packs a punch.

“This is a major blow to MSSB,” Winks says.

Mentioned in this article:

Sr. Consultant
Consulting Firm
Top Executive: Stephen Winks

Share your thoughts and opinions with the author or other readers.


Brooke Southall said:

August 3, 2012 — 12:02 AM UTC

AZpro…I am eliminating the comment you left because it has more of an axe-to-grind flavor than an intellectual viewpoint.



John Smith said:

April 6, 2013 — 3:52 PM UTC

There will always be a conflict of providing fiduciary standards within a suitability environment. Hopefully this is a signal of more advisors seeking to level the playing field for their client…offering advice and services which are in the best interest of the client rather than the inevitable conflict of trying to serve two (at least) masters. I’ve always thought this business was about the asset owner and not the advisor…perhaps this gentleman feels the same way and time will tell if a Hightower or whoever is willing/ able to support a fiduciary approach.


Stephen Winks said:

April 7, 2013 — 8:31 PM UTC

John Smith,

You are absolutely correct. providing advice is all about the consumer as the consumer determines relevancy. The same reason why cients want their broker to act in their best intererst is why brokers can not compete. Boker dealerswill not acknowledge the broker renders advice or has a fiduciary duty to act in the best interest of the investing public Bcause by design the broker is not accountable nor has ongoing responsibility for their recommendations, the advisor can routinely do an asset/liability study on all a client’s holdings and find the prospective client’s portfolio has assumed twice the market risk for half the return, there is no rhyme or reason for individual holdings, there is no understanding of cost structure leading to the highest cost investment alternatives, the tax structure of the portfolio has crippled portfolio liquidity and investment performance. There are easily 20 or 30 ways an advisor can materially improve the prospective client’s well being.

Brokers of good conscience have begged their broker/dealer to support their fiduciary standing. Even an Act of Congress has not moved the broker/dealer. The only choice is to seek better support elsewhere.

This is a failure of industry leadership.

Very sad.



http://www.bentu.co/space-uid-225659.html said:

June 26, 2014 — 1:33 PM UTC

Even though several properties in the UAE are experiencing design delays, it truly is checked in with Angela Giuffrida, a home reporter below to the organization desk, and he or she thinks the iPad undertaking may be going ahead.Apple iPad Keyboard Dock


http://www.wadecraiggroup.com/SR_BIlling.htm said:

June 26, 2014 — 3:06 PM UTC

John Paduchak is admittedly a overall health investigator along with the web site owner of and created to help mother and father and people with ADD/Attention deficit hyperactivity disorder come across purely natural treatment plans & information to enhance their lives. John has Focus deficit hyperactivity disorder and it is actually a parent or gaurdian of two youngsters with ADD/Attention deficit hyperactivity disorder. Certainly just one of his young ones Consideration deficit hyperactivity disorder indicators and signs or symptoms have been so serious it forced him to entire continual investigation about them and share it with everybody who could possibly make the most from the effort from the sites.The Nice And Cozy Welcome For iPad2

Submit your comments: