Case Study: Hightower Advisors, LLC
Description:
HighTower Advisors (“HighTower”) was created with a business model that consists of gathering a team of successful investment advisors from traditional brokerage firms and helping them transition to a fiduciary and fee-based model while providing them with autonomy in client service with minimal bureaucracy and maximum independence. Since HighTower advisors take an unwavering fiduciary approach with their clients, they can offer unbiased, transparent advice that is unattached by corporate goals, incentives or quotas. By consolidating high-net worth investment advisors, acquiring their high net worth client’s assets and making each advisor a stakeholder in the company, HighTower is able to offer superior solutions to a rapidly growing wealth segment.
Investment Thesis:
The weak US economy, volatile stock market, increasing investible assets and shakeups at large Wall Street firms have caused investors and brokers to reevaluate their relationship with large wirehouses. Despite the global economic slowdown, HighTower has benefited tremendously from disruptions occurring at larger wirehouses. The confluence of the dislocations in the financial sector along with HighTower’s timely independent financial advisory model and validated success has helped HighTower become a leading financial advisory firm. A combination of the 76 million “Baby Boomers” rapidly approaching retirement and a growing distrust towards brokerage firms will drive investors towards independent channels to manage their assets. HighTower is well-positioned to capitalize on the declining perception in the ability of large wirehouses to adequately serve consumers and their retirement needs.
From Celent, 2006
DLB Role:
DLB became the earliest investor and operator of HighTower after being approached within a broader consortium of other investors. HighTower’s compelling business model and management talent presented a significant opportunity. In addition to coordinating both funding rounds, DLB brought significant capital and acted as the largest bridge investor. Doug Brown currently serves as Co-Chairman of HighTower’s Board of Directors. In that role, he acts as a sounding board for management, helps redefine HighTower’s business practices and assists management in the recruitment of financial advisors. Additionally, DLB provides industry research and valuation analysis and helps HighTower management establish relationships with investment banks to help develop a familiarity with the Company.
Current Status:
HighTower Advisors continues to benefit from brokers leaving wirehouses who are seeking an efficient way to go independent. HighTower is focused on providing the most efficient transition support to financial advisors and continues to attract financial advisors as a result of its unique platform.
To learn more about HighTower, visit www.hightoweradvisors.com