Why HighTower Has Pulled Out of the Broker Protocol
Following its larger rivals in the wealth management space, HighTower has withdrawn from the Protocol for Broker Recruiting, according to news reports.
Set up in 2004 by Merrill Lynch and UBS, among others, the industry accord aimed to make it easier for brokers to take some client data with them when departing firms without the threat of lawsuits, and more than 1,600 firms are currently signees, despite Morgan Stanley and UBS itself dropping out in 2017, WealthManagement.com writes.
HighTower has now followed the two wirehouses, purportedly because once it stepped away from its partnership model and instead focused solely on offering RIAs capital and support services, being a part of the protocol became unnecessary, according to the web publication.
“When RIAs are making a decision to do a deal with HighTower, they are coming onto our [Form ADV], and they are taking advantage of our HR, finance, compliance, and our core infrastructure, and they are making a decision to be part of the firm for the long term,” HighTower CEO Bob Oros tells WealthManagement.com.
The shift in focus to serving only RIAs occurred after Oros took over as HighTower’s CEO from its founder Elliot Weissbluth in January, according to the web publication.
In fact, staying on as a participant in the industry accord would have “risked confusion that maybe we were something that we’re not,” Oros said, according to WealthManagement.com.