Hightower, one of the original registered investment advisor consolidators, is continuing to hone its “Hightower 3.0” strategy to help its “best performers” grow, according to CEO Larry Restieri.
Restieri pointed to the recent news that the firm would be fully acquiring one of its partner firms, The Bahnsen Group, as the start of what he called a “franchise” model for Hightower’s top-producing affiliates. Through the deal, which is expected to close in the third quarter, the Bahnsen Group will be a beachhead for integrating other firms, adding to its brand name “A Hightower Company.”
Restieri said he expects Hightower to make similar moves in the future, while continuing to build out the new Hightower Signature Wealth RIA channel that he and his team have grown to more than $29 billion in client assets in a matter of months.
“We realized some of the success we’d had with Hightower Signature Wealth and how that model could work,” Restieri said. “As I’ve talked with [majority owner] THL and with the board, we’ve had this view that, if we want to grow, we should double down on our winners. And why not put dollars behind some of our best performers?”
Restieri said David Bahnsen, who is on Hightower’s board, was a natural fit to kick off the strategy. Bahnsen created the Newport Beach, Calif.-based firm from a Morgan Stanley lift-out in 2015, with eight team members and $600 million in assets under management. Since then, the Hightower affiliate has grown to $10 billion in client assets with 12 locations and 100 employees.
“We don’t see why he couldn’t be $25 billion in the not-so-distant future if we partner with him in terms of his growth,” Restieri said.
The Move Toward Integrated Models
The CEO is quick to note that Hightower continues to support and see a future for its network of independent, but affiliated RIAs. But he also sees Signature Wealth and the franchise model as increasingly attractive for advisors looking to leverage scale, resources and, eventually, succession options.
“We’re going to have a bunch of independent firms,” he said. “But I could see a path where a strong majority of the firms were either Hightower Signature Wealth or one of these flagship brands.”
Cory Kupfer, founder of Kupfer, which works with breakaway advisors, said the RIA market as a whole is moving toward more integrated models.
“There are all kinds of PE money in the space, and eventually there is going to be an IPO,” Kupfer said. “Public markets like models that are scaled and repeatable—that is the context that everyone is swimming in.”
He said Hightower Signature Wealth, along with integrated franchises, makes sense. While the advisor-client relationship will remain unique, the organization will seek to achieve “scale that can work at a repeatable level.”
The flagship model is a follow-up to Restieri’s first major move, the launch of the Signature Wealth national brand.
Part of that strategy has been the creation of a unified wealth technology platform that offers in-house, proprietary options for advisors, with an open architecture that allows choice. That effort has been spearheaded by Randy Bullard, a former State Street executive whom Restieri hired in September, and who recently told Wealth Management that Signature Wealth firms will start joining the platform this summer.
“We made a conscious decision to build a platform on a fresh tech stack,” Restieri said of what the firm is calling Hightower One. “That has enabled us to move very quickly with some kind of new wealth tech to really advance what we’re doing in terms of onboarding and client life-cycle management, and then what we’re doing with the investment platform.”
One investment option for advisors will be to leverage institutional research and investment counsel from Hightower’s affiliate, NEPC.
Being Advisor Friendly
Restieri took over as Hightower’s third leader after Bob Oros, who scaled the firm through numerous acquisitions and deals, including the majority stake in NEPC. Restieri came from Goldman Sachs’ Ayco, a role in which he also worked to integrate Goldman’s acquisition of RIA United Capital, which it later sold. The now RIA CEO said he learned lessons from that process that have informed how he and the team are approaching Hightower advisors.
“I certainly learned a lot about just the advisors and how to manage change at the advisor level, but also what’s important to advisors and what’s not as important to advisors,” Restieri said. “As we embark on what we’re doing with Hightower Signature Wealth, and with Hightower One, especially, I think we’re trying to do it in a way that is as advisor-friendly as possible.”
Attorney and consultant Kupfer said Hightower’s strategy is similar to that of Focus Financial Partners, which, a few years ago, began to consolidate about 90 independent firms into hubs. That direction was partly driven by Focus eventually failing to remain a publicly listed firm, due in part to its lack of integration.
“The public markets have made it very clear that the less integrated strategy is less attractive,” he said. “There will always be alternatives out there that push against the consolidated model, but over time, they will likely be the outliers.”
Hightower’s majority owner, Thomas H. Lee, first invested in 2017. It went to market to sell its stake in 2024, only to pull back.
Restieri said THL has been “a great partner” and will “continue to invest in the business.” But he added that it’s hard to say if, or when, there will be a change in ownership.
“The capital markets will determine that, and our own growth path will determine that,” he said.
For now, Hightower will continue to execute on its strategies, including considering firms that could be new flagships.
“I think we could take some of them to the next level if we put the right dollars around marketing and strategy and help make them bigger than they ever thought they could be,” Restieri said.
