HighTower Advisors is accelerating its identity makeover.
In a decisive move to break with its old business model of attracting breakaway brokers, the $50 billion RIA will exit the Broker Protocol, an industry agreement that smooths advisors’ career moves.
In another high profile move, HighTower has hired one of the advisory industry’s most prominent marketers, Abby Salameh, formerly the CMO of Private Advisor Group, a $22 billion OSJ with LPL.
“We want to clarify who HighTower is now,” says CEO Bob Oros, explaining the decision to leave the protocol. “We were part of the protocol when our business model centered on recruiting wirehouse teams. But we’re no longer a collection of teams. Our growth is
Recruiter Mark Elzweig believes the move makes sense for HighTower, but will not have wider industry repercussions.
“Since HighTower is focused on acquiring stakes in other RIA firms, they don’t need to be in the Broker Protocol,” Elzweig says. “They are doing M&A deals. But I think that the impact on the broader industry, especially wirehouses, regionals and independent firms, will be nil because those firms need to remain in the protocol to have any hopes of attracting successful producers.”
Elzweig also notes that quitting the protocol makes it more difficult for current HighTower advisors to leave the firm.
"The Broker Protocol is no longer relevant to us or to our advisors," says HighTower CEO Bob Oros.
“HighTower wants advisors to stay as they build up the firm for an eventual liquidity event,” Elzweig says. “They’re offering advisors compelling reasons to stay but this also makes it harder for them to leave. Maybe it’s part of HighTower’s total retention strategy.”
Oros says it isn’t.
“HighTower now owns more than 80% of its advisory businesses,” he says. “Given our sizable, stable ownership stakes in all of these businesses, the Broker Protocol is no longer relevant to us or to our advisors, and we would not need to exit the agreement as a retention strategy.”
Hiring Salameh as chief marketing officer is also a big part of HighTower’s redefinition, Oros says.
“Abby is a very good marketer who will help us make clear who we are and who we aren’t,” he explains.
For years, the Broker Protocol provided "legal air-cover to execute our business plan," said former HighTower CEO Elliot Weissbluth.
Salameh says she wants to boost organic growth, referrals and centers of influence through marketing support. Marketing priorities, she says, will include helping advisors identify and close on tuck-in opportunities, targeting prospects, increased use of social media and blog content and use of artificial intelligence to drive lead generation.
HighTower currently allows some local offices to retain their own local branding. Salameh says she will evaluate that policy and work with advisors to help them determine if they will benefit most from retaining their own brand or adopting the HighTower brand. The corporate brand “has not been properly communicated” in the past, she says.
While HighTower is unlikely to increase spending on consumer advertising, the firm will put additional resources behind business-to-business marketing efforts, Salameh says.
As for the Broker Protocol, HighTower’s exit follows
But the decision of
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With an eye on a future sale, the $48B RIA wants to build enterprise value.
May 1 -
Bob Oros is a leading candidate to head the RIA, but he, or any other successor, will be under “super pressure” from the firm’s owners.
November 14 -
The firm's advisers and competitors are wondering about its next steps, and who will cash in. The answers will go a long way toward shaping the future of the independent channel.
March 28
Morgan’s size — it has nearly 16,000 advisors and more than $2.3 trillion in AUM — prompted fears of a mass exodus from the protocol, an industry-wide accord that permits advisors switching employers to take basic client contact information with them.
Yet despite worries about the protocol's future, a wave of company departures did not immediately materialize. Several industry leaders, including Merrill Lynch and Raymond James, reiterated their support for the protocol. And Hilliard Lyons, a small regional brokerage, actually signed on in March 2018.
To be sure, career moves have become more complicated for advisors at Morgan Stanley and UBS, given the limitations on what information they can take with them and Morgan's willingness to enforce advisors' non-solicitation agreements.
And the decision to leave the protocol “hasn’t helped the reputation” of Morgan and UBS among advisors, Elzweig says.
Additional reporting by Andrew Welsch.
