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New Heights For HighTower, The Anti-Conflict Advisor

This article is more than 8 years old.

The way Elliot Weissbluth sees it, he's understood the meaning of fiduciary duty since long before he became a financial advisor.

As the son of a pediatrician, Weissbluth says he learned at a young age what it means to make decisions only in the best interests of another person. Later, when he spent six years as a trial lawyer in Chicago he began applying those lessons in a professional setting.

"I come from DNA where being a fiduciary is a way of life," he says, and when he launched Chicago-based HighTower Advisors in 2008 it was a bet that plenty of other financial advisors felt the same way about putting their clients first and were hungry for an excuse to leave brokerage-tied jobs rife with conflict.

That bet has paid off in spades. HighTower ranks second among the Top 100 Wealth Managers, with $20.6 billion under management, up 37% from a year ago.

Click Here for the 2015 Forbes list of Top 100 Wealth Managers

When Forbes last profiled HighTower in 2013, Weissbluth stressed the goal for HighTower was to be a platform for savvy financial advisors who wanted "the support of a big firm without all the negative press and conflicts of interest." The message remains the same today.

"How do you argue with putting clients first and having a legal duty to do that?" he asks.

HighTower was formed at an opportune time, launching at a moment when the country's largest financial institutions were being brought to their knees and hitting its stride at a moment when transparency and accountability were a renewed focus thanks to the Bernie Madoff Ponzi scheme.

The crisis and its aftermath exposed the fact that people weren't getting the benefit of all financial innovation touted by the industry. "Everybody was lining their pockets at the expense of the investor," says Weissbluth.

HighTower has been able to deliver on it's mission, for both clients and the advisors it has brought on board. Weissbluth notes that the average HighTower advisor grows their business 20% annually, well above the industry average.

The future looks even brighter, as millenials seek out fiduciaries and show far weaker ties to legacy brand names than their baby boomer predecessors. As for the much-ballyhooed threat of technology solutions to make advisors obsolete, Weissbluth thinks it's just as much of an opportunity.

Click Here for the 2015 Forbes list of Top 100 Wealth Managers

He points out that the approximately $2 trillion advised by fiduciaries (RIAs or hybrids) is a relative pittance compared with the amount managed by brokerage firms and wirehouses, and expects that the burgeoning fleet of robo-advisors is likely to take a larger bite out of the latter than the former.

"If you measure the relationship in basis points, the robo technology is interesting for the do-it-yourselfers," he says, "but if a young married couple views the financial advisor as part of their team, basis points off the portfolio aren't the only thing."

In the future Weissbluth projects, robo-advisors and traditional wealth managers will fall into complementary roles as the industry continues to evolve away from its traditional, conflicted roots.

"I think we're in a renaissance period of financial advisory work and I use that word specifically," he says. "There are all sorts of interesting new ideas and companies meeting the demands of customers." He sees technology helping "ferret out hidden costs," and "chipping away at advisors and brokers who are providing recommendations poisoned by conflicts of interest."

As for the current investing landscape and the prospects for returns, Weissbluth straddles the line between optimism and realism.

"We live in uncertain times," he says, "but they've been fairly good uncertain times for the last four or five years. I don't bet against the U.S. economy or American ingenuity; if you look at the history of our economy and stock market, we've been a pretty good bet."