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November 18, 2013

HighTower Growth Continues With Andriole Group From Merrill

Group that manages $700 million is first from Connecticut to join HighTower, and 40th overall

HighTower announced Monday that a former Merrill Lynch advisor team—The Andriole Group of Madison, Conn.—has joined the Chicago-based HighTower partnership, the second such advisor transition this month, the first from Connecticut and the 40th since HighTower was founded in 2008.

The Andriole Group, which ranks 10th in Barron’s current top advisor listing in Connecticut, manages $700 million in high-net-worth client assets. Nine Andriole Group principals, advisors and administrative personnel, including Charles Andriole, are making the move to HighTower.

Barron’s listing puts the typical client account at Andriole at $3.5 million, with the typical client’s total net worth at $7.5 million. In addition to Andriole, three other principals have become partners and managing directors at HighTower: Geoffrey Gregory, Robert DeLucca and Matthew Montana.

In an interview, Andriole said that the decision was prompted by the firm’s mantra that taking care of clients now and in the future will ensure the firm’s own success. “We did a lot of due diligence on what would be best” for the firm and its clients, he said, and “we became absolutely convinced that the HighTower model was in our clients’ best interests.”

Andriole said “we want to spend our day taking care of our clients,” so HighTower’s presence as a national firm with a strong infrastructure, with “deep operational resources,” its multicustodial model, its compliance support and its “unbiased research and analytical tools” helped lead to its choice.

Another factor in the decision was HighTower’s partnership model, in which partner firms help decide which products or technology the entire firm should offer. “I’m familiar with a number of firms that have transitioned to HighTower,” Andriole said, “and we do have an interest in being part of something bigger, and making contributions. We’re very excited about the synergy of collaboration” at HighTower.

Prior to Andriole, the last team to join HighTower was Klein Wealth Management, based in Melville, N.Y., and led by Peter Klein, who was formerly a UBS advisor and whose team specializes in providing tax-efficient strategies for high-net-worth clients and private foundations, with a focus on philanthropy.

When Klein's joining was announced Nov. 11, Mike Papedis of HighTower said in a statement that “When Peter and his team made the decision to join HighTower, we mobilized our deep resources during what has typically been a quiet time for advisor movement.”

'We've Cracked the Code'

So why has HighTower succeeded in attracting so many high-powered advisors from the wirehouses? "I think that’s because we've cracked the code," said HighTower Executive VP Papedis in an interview Monday. HighTower, he said, provides "the best of both worlds for these large, sophisticated advisory firms" who want "autonomy but in a collegial environment."

Firms like Andriole and Klein reflect a change on Wall Street, he argued. "In general, teams who want to be entrepreneurial and who are seeking a fiduciary model have outgrown Wall Street firms," he said, and "along their road to independence, we intercept them."

Rather than the wirehouses' "corporate, top-down approach," at HighTower "all decisions orginate with advisor partner input," Papedis said. In that collegial partner environment at HighTower, these "top-performing financial advisors are all rooting for their fellow members," share best practices and sometimes partner with each other, all "with the foundation of 'clients first.'"

Beyond the partner level, though, Papedis says HighTower invests "significant time and resources" with the partners' "field professionals," i.e., their sales assistants and other staff members, aiding in those members' own staff developments. That investment includes holding national gatherings for staff members twice a year, along with smaller "strategic councils" that meet from time to time.

As for Wall Street's culture, in his interview Andriole said that “the business has changed significantly in the last five to seven years,” particularly in client expectations — something that HighTower recognized early, he says. Clients, Andriole said, “want us to think independently, transparently, with no obstructions or biases,” and to follow “the fiduciary model, the legal duty to act in our clients’ best interests.”

So how have clients responded to Andriole’s decision to cast its lot with HighTower? “There’s been an exceptional response from clients—more congratulations than we could have imagined,” he said. In addition, he said he’s received “numerous congratulations” from executives he knows at wirehouse firms. “We couldn’t be happier, and more confident,” he concludes.

Papedis said that adding teams like Andriole's has another positive effect beyond strengthening the existing HighTower partnership. "None of our advisors breach any employment contracts they have" with their former employers, he said, but when "we attract these high-performing teams, our pipeline deepens and our phones light up."