300 aggregated folks dined lavishly and heard Ed Viesturs; and those perks may have a deeper purpose

May 15, 2012 — 3:15 PM UTC by Lisa Shidler


Brooke’s Note: HighTower has enjoyed perhaps unprecedented success as an aggregator in terms of how many assets it has consolidated so quickly. Part of the company’s recipe for success lies in its ability to combine aspects of a cutting edge RIA with wirehouse aspects that advisors would just as soon not leave behind. See: Casting a wider net for talent, HighTower poaches an MSSB branch manager. That philosophy can be put into action in everyday life in terms of office space and the ability to execute transactions that looks like a wirehouse, but it extends further to cultural factors. One of them is to have high-level discussions about how to advance the business in RIA fashion but to do so followed by a soiree with a level of swank and camaraderie associated with old Wall Street days. Here is a peek into all of that.

The focus of HighTower Advisors LLC’s Spring 2012 Partnership Dinner held last Thursday on the 16th floor of Chicago’s swanky Trump International Hotel & Tower looking out on Lake Michigan, was as much about looking back on the firm’s successes as it was about reaching new peaks of success.

The recent past offered ample cause to celebrate — the aggregator has raked in more assets in the first quarter of 2012 than in all of last year: a total of $5.2 billion in assets from breakaway teams as compared with some $4.9 billion in assets in 2011.

HighTower’s biggest catches this quarter included James Pupillo and his team’s $2.5 billion in assets The Kelly Group’s $700 million in assets James Hausberg’s $400 million in assets HSW’s $1.4 billion in assets and former Merrill Lynch senior vice president Charles Holt’s $200 million in assets.

Ev’ry mountain

At the dinner, HighTower CEO Elliot Weissbluth reminisced about his company’s humble beginnings — a far cry from the elegant Trump banquet hall at which 300 advisor-partners feasted on seared red snapper and veal tenderloin.

The Trump Tower stands out on the Chicago skyline.
The Trump Tower stands out on
the Chicago skyline.

“A few years ago we had this meeting with just 20 of us in our old headquarters in the basement eating deli sandwiches,” he says. “I see 300 or more people who are responsible for our success.”

The challenge of reaching new peaks clearly appeals to Weissbluth, an avid amateur mountaineer who asked his own personal idol — Ed Viesturs — to speak.

Viesturs spoke in gripping detail about his 18-year quest to climb each of the world’s 14 highest mountains, which involved many treacherous trips before he achieved the summits.

Top of the world, ma!

Chatting with a reporter later that evening, Weissbluth said he believes that HighTower is going to climb to the next level by bringing on many more advisors.

Ed Viesturs lent his unimpeachable credentials and storytelling abilities to the affair.
Ed Viesturs lent his unimpeachable credentials
and storytelling abilities to the affair.

“We’ve had more assets in the first quarter than all of 2011 because our solution is better than theirs. Our strategy hasn’t deviated on the type of advisors and the quality of advisors. We’re going after only the best and the most sophisticated. I think the market is realizing that it is not only possible but it is easy to leave the major wirehouse and take your clients.”

Taking the best, leaving the rest

It’s no secret that wirehouse advisors are accustomed to being wined and dined, and Weissbluth concedes he still wants to provide such perks as a way of thanking them.

“We want to duplicate the good experiences of the wirehouses,” Weissbluth says. “We think there’s a lot of powerful innovative energy and we want to capture that.”

'Not just fluff’

Mike LaMena, HighTower’s chief operations officer, told me he that a great strength in HighTower’s business model is its ability to allow advisors to freely share their opinions.

“At events like this, our advisors interact around real topics and this is not just fluff,” LaMena says. “We’ve fostered a culture in which advisors are encouraged to speak openly and directly. Debates are nothing out of the ordinary. If someone has an issue or concern, they’re expected to put it at the table.”

Weissbluth echoed the premium LaMena places on candid talk.

“This is a partnership. If they’re not disagreeing, they’re not engaged,” Weissbluth says.

LaMena: This is not just fluff.
LaMena: This is not just fluff.

The whole truth

Indeed, over dinner advisors discussed their wirehouse days when they feared for their jobs if they ventured to share their true opinions.

Noting the change of culture, Peter Lang, whose team was the 11th to join HighTower from Morgan Stanley Smith Barney LLC about two years ago, says he has, in fact, disagreed with Weissbluth on a few occasions. See: HighTower doubles recruiting staff and seeks green pastures of Morgan Stanley Smith Barney brokers.

When asked about the specifics of those disagreements, Lang demurred with a sly grin.

“He’s not always agreeing with the things I may say, but there’s a respect there and we all respect one-another,” Lang says.

Real sharing

Lang says that advisors also feel more comfortable sharing their in-house secrets with other advisors.

Advisor Jeff Leventhal said he never felt comfortable talking that candidly at a wirehouse because he felt like he was competing with his peers. See: HighTower extends its winning streak of luring breakaways near the nation’s capital.

“At the wirehouse, people are afraid to share,” says Leventhal, who broke away from UBS last fall. “It’s not the same feel. Here, you have ownership and you want the firm to grow. There, you are treated as a number.”

There’s certainly more collaboration at HighTower, agrees advisor Michael Bapis, who moved over about 3-1/2 years ago from Morgan Stanley. His office manages about $800 million in assets.

Jeff Leventhal: At the wirehouse, people are afraid to share.
Jeff Leventhal: At the wirehouse, people
are afraid to share.

“People want to help each other learn. It’s pretty neat to see us have grown this much. It sounds corny, but here you get to let your guard down and you really feel comfortable sharing ideas, because we are all in this together.”

Behind closed doors

In fact, while the dinner — which, by the way, topped off the haute cuisine surf or turf with an exquisite dessert of ginger ice cream topped with fresh blueberry syrup — was great fun, advisors reported that they had logged eight-hour days of back-to-back meetings over the three-day event.

The media was not allowed in on these closed-door meetings, but advisors said these meetings are quite different from their wirehouse counterparts.

Lang, who is one of 10 advisors on the firm’s strategic and long-term planning committee, says he feels his voice is heard and that he plays a real role in planning HighTower’s growth strategy.

“The focus is trying to identify long-term trends, and we’ve spent hours in meetings focused on planning for the growth and betterment for the firm,” Lang says.

Dropping in on NAPFA

On my way to the HighTower banquet, I stopped off at the national conference of the National Association of Personal Financial Advisors. NAPFA’s venue, the Chicago Hilton, just off Chicago’s famous Michigan Avenue, wasn’t nearly as glamorous as HighTower’s Trump Tower site. In fact, it was held in the hotel’s basement. Although advisors seem to like the venue, NAPFA chief executive Ellen Turf concedes that next year she’ll be aiming to move up in the world — or at least to a higher floor. Next year, NAPFA will host its convention in Las Vegas. In 2013, the group planned to be back in Chicago. However, there are limited hotel choices in Chicago that offer space for the organization’s more than 500 attendees — the number of advisors it used to attract before the market collapse in 2008, Turf says.

But while NAPFA’s food and atmosphere is simpler in style, the content of the discussions was right on par with HighTower’s. NAPFA is known for holding dozens of breakout sessions that give rise to thought-provoking conversations, and this year was no exception.

Tips on tweeting

Pinnacle Advisor Solutions Michael Kitces, who is always happy to offer tips on tweeting, spoke in great detail about how advisors can build their brand by using Twitter. See: Michael Kitces becomes partner at Pinnacle, ambassador for its new TAMP-like service.

He says Klout.com is the perfect tool for advisors to use to determine how effectively their message is getting across to their target audiences.

Mentioned in this article:

National Association of Personal Finance Advisors
Top Executive: Ellen Turf

Consulting Firm
Top Executive: Michael Kitces

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