Since its founding in 2008, HighTower Advisors has expanded at a brisk pace–with 15 new partnerships and counting, many of them from breakaway wirehouse advisors from New York, California and, of course, Chicago, where HighTower is headquartered.
Perhaps unsurprisingly, considering HighTower’s phenomenal growth, the firm has been the subject of lawsuits. Morgan Stanley Smith Barney sued HighTower in February, accusing it of stealing advisors and clients. And one of the firm’s advisors, Curtis Lyman, formerly of Lehman Brothers, was sued this spring by investors in Florida for investing their money in an alleged Ponzi scheme run as a feeder fund by a disbarred lawyer.
HighTower CEO Elliot Weissbluth in an April 1 interview with Reuters gave his “unreserved” support to Lyman, saying, “Curt Lyman is as much a victim as the other Ponzi scheme victims.”
Ranked No. 1 in Wealth Manager’s quarterly ranking of RIA firms by AUM, Weissbluth stood still long enough to be interviewed by Joyce Hanson of the Investment Advisor Group in early August.
Tell me your thoughts on the issue of fiduciary responsibility.
I think the fiduciary responsibility has provoked a lot of questions about what it really means to put your client first. The large firms are simply not in the business of upholding a fiduciary standard, so it’s going to be very difficult for them to adopt a fiduciary standard without significantly changing their businesses, which I don’t think is tenable.
While there’s been a lot of conversation, a fiduciary standard is not something that can simply be regulated and enforced on an entire industry.