Welcome to Financial Advisor IQ

One WealthTrust Firm Won’t Be Joining HighTower

By Thomas Coyle April 14, 2017

Global Financial Services will not be joining other WealthTrust stablemates in their move to HighTower.

“We are not part of the deal,” Gerardo Chapa, managing director and founder of Houston, Texas-based Global Financial Services confirmed to FA-IQ.

Chapa declined to elaborate.

In a widely anticipated move, HighTower yesterday said it planned to buy WealthTrust from Lee Equity Partners. In its announcement of the impending deal, HighTower said WealthTrust “includes $6.4 billion in client assets nationwide.”

But, according to their separate ADV filings, the combined assets under management of the 12 WealthTrust firms comes to about $8.5 billion.

Houston-based Global Financial Services manages a bit less than $2 billion, according to its ADV, which was updated last month. It’s owned by Summer Wealth Management — which is in turn owned by intermediaries of Lee Equity and Edelman Financial Services.

HighTower, WealthTrust and Lee Equity declined to comment on the deal or say why Global Financial Services wasn’t part of it.

It’s possible Global Financial Services was not included with the others because it was on its way out of the partnership as the deal with HighTower was taking shape.

There has been at least one other recent departure from WealthTrust.

Norfolk, Va.-based Wilbanks, Smith and Thomas, which manages $2.7 billion, left the network late last year.

And it's possible there have been other exits — even if they’ve flown under the radar. In September 2015, Lee Equity said it was combining eight wealth firms in its portfolio — among them Global Financial Services — with eight WealthTrust firms under the WealthTrust umbrella.

Even if those 16 firms have been entwined to make the 12 now in WealthTrust, there’s no getting around the fact that the then newly-minted WealthTrust’s combined assets under management — $15 billion less than two years ago — is far enough from today’s $8.5 billion to suggest an exodus from WealthTrust has taken place since.

HighTower got help on the WealthTrust deal from Silver Lane Advisors, an investment bank in New York that specializes in financial-service transactions.

Terms of the deal between HighTower and Lee Equity for the bulk of WealthTrust weren’t disclosed.

WealthTrust, founded nearly 20 years ago as one of the first RIA-aggregation firms, has changed hands at least three times since 2006.