Hightower Advisors, LLC
Hightower Advisors is a registered investment advisor (RIA) with the U.S. Securities and Exchange Commission (SEC). Headquartered in Chicago, this fee-based firm has acquired other successful RIA firms in recent years.
According to its website, the firm now supports "over 128 elite financial advisory businesses across 34 states."
Its network of partner advisors provide individual and institutional clients with investment advisory and financial planning services.
Hightower Advisors Background
Hightower Advisors was launched in 2008. Bob Oros is the chairman and CEO.
Today, the firm is a subsidiary of Hightower Holding, LLC, which is mostly owned by private investment funds managed by Thomas H. Lee Partners. Some Hightower employees also have ownership, but no single person or group (other than the THL Entities) owns more than 25%.
Hightower Advisors offers advisory services to individuals and institutions, including ERISA-covered retirement plans. These services are provided through a network of advisors, each with their own focus and strategies based on their clients' needs.
Hightower Advisors Client Types and Minimum Account Sizes
According to its SEC-filed brochure, Hightower Advisors serves the following types of clients:
- Non-high-net-worth-individuals
- High-net-worth individuals
- Pooled investments
- Retirement plans
- Charitable organizations
- Government entities
- Insurance companies
- Businesses
Generally, the firm doesn’t require a minimum investment to start a relationship. However, the advisory notes that its services may not benefit clients with small asset levels due to higher fees.
Services Offered by Hightower Advisors
Representatives of Hightower Advisors generally provide investment advisory services on a discretionary basis. This means advisors are authorized to sell or purchase securities as they see fit to meet your investment goals based on your Individual Investment Policy Statement (IPS).
Advisors may also provide stand-alone financial planning services upon request. Depending on your goals, these services may encompass some or all of the following:
- Estate planning
- Retirement planning
- Insurance management
- Asset allocation review
- Cash management and certain Treasury services
The firm may also offer access to unaffiliated third-party money managers who can provide specialized asset management services. These managers may provide additional research and investment management expertise. Hightower Advisors monitors and evaluates these managers in order to determine whether they are suitable for particular clients. However, clients will come into separate agreements with these managers if they agree to work with them.
Additionally, the advisory works with plan sponsors who manage employee benefits like 401(k) plans and 403(b) plans.
Hightower Advisors Investment Philosophy
Hightower Advisors’ investment advisory process starts with a thorough assessment of the client. The firm will gather key information such as the client’s risk tolerance, investment goals, preferences and more. Hightower Advisors uses this information to develop an IPS for the client as well as an appropriate asset allocation for an investment portfolio.
The firm doesn’t limit itself to investing in specific securities and will allocate client assets across the securities universe as it deems appropriate to meet the client’s goals. Hightower Advisors also employs the following methods when evaluating these investments:
- Charting. Predicting the performance of a security based on past price movements and other available information
- Fundamental analysis. Conducting an in-depth analysis of a company's financials throughout a certain period of time in order to determine future performance
- Technical analysis. Making economic projections based on patterns and trends of a particular security or sector
- Quantitative analysis. Creating mathematical models to predict price movements and other factors of a particular security or sector
Fees Under Hightower Advisors
For investment advisory services, clients generally pay advisory fees as a percentage of their AUM. Advisors determine this percentage at different asset levels. For example, it may be a 1.00% annual advisory fee on the first $1 million. However, these fees are typically charged on a quarterly basis using the fair market value of the account as of the last business day of each quarter. So the quarterly fee would translate to a fourth of the annual fee in this scenario.
Clients may enter either a wrap-fee or unbundled fee schedule for investment advisory services. The wrap program covers the firm’s advisory fee along with the custodial and transaction fees paid to other entities involved with the management of your account. In this case, the client would work with the advisor to determine an appropriate wrap-fee schedule.
Investment advisory fees paid to the firm are separate from expenses charged by the underlying funds that the client’s portfolio invests in. These may include mutual fund and exchange-traded fund (ETF) expenses levied by the applicable fund managers. While these aren’t paid to Hightower Advisors, they would reduce your account size. You can find detailed information about these expenses in each fund’s prospectus.
For financial planning services, fees are on an hourly or fixed basis. The extent of these fees would depend on the scope of the services rendered.
Overall, fees are specific to the advisor you work with through Hightower Advisors and the services you receive.
What to Watch Out For
As of its most recent SEC filings, Hightower Advisors reported four disclosures of legal or regulatory actions.
A couple of other things to note: Hightower Advisors' many affiliations in the financial services industry may pose conflicts of interest. Also, its representatives who are brokers or insurance agents have potential conflicts of interest in that they collect commissions and other transaction-based fees. That said, the firm is legally bound by its fiduciary duty to disclose all conflicts of interest and to act in clients' best interests at all times.
Opening an Account With Hightower Advisors
To contact Hightower Advisors, call (312) 962-3800. You can also find advisors close to you by visiting its website: https://www.hightoweradvisors.com/find-advisor.
Tips for Finding a Financial Advisor
- Before you sign up with a financial advisor, make sure he or she is a fiduciary. This means the advisor is legally bound to put your best interests first. For more things to know about prospective advisors, check out our story about the 5 questions to ask when choosing a financial advisor.
- Finding a financial advisor doesn't have to be hard. SmartAsset's free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
All information was accurate as of the writing of this article.
