Three months after a $100 million private equity capital infusion, HighTower Advisors added a $365 million RIA to its platform that was previously affiliated with Securities America.
The wealth management firm, Financial Principles, consists of partners Bradley Bofford, Michael Flower and Daniel Trout and has offices in New York City and Fairfield, New Jersey. The team includes five other professionals and serves business owners, executives, families and retirees, the firm says.
The benefits of scale, including the ability to work with multiple custodians, were a main reason the firm went with HighTower, Flower says. “Pricing on those was much better than if we went direct and opened our own RIA,” he says. “We’re so used to everything going up in price. It’s nice to call clients and say: ‘Good news. We actually have something that’s going down in price.’”
For HighTower, the new addition adds a significant chunk of assets to the RIA, which last month closed on the mega-acquisition of Salient Private Client, one of the largest wealth managers in Texas with $2.1 billion in client assets.
HighTower has undergone significant changes since the PE powerhouse Thomas H. Lee Partners bought a majority stake. The RIA added a $450-million breakaway team to its platform, parted ways with three top executives in a management shake-up, harmonized its share classes and restructured its credit line to take on more debt for future acquisitions.
As for Financial Principles’ former broker-dealer, the practice had simply outgrown the firm. “One drawback we saw early on was that there are a lot of different advisors at Securities America, and the firm might be managing for the ones that will give them the most problems,” Flower says, citing the looming fiduciary rule. “We felt like a move to HighTower was a better place for us.”
An acquisition wasn’t “really attractive” to the firm because the partners are all relatively young — in their mid-40s — and weren’t interested in selling their book, Flower says. Instead, the firm was looking to add scale at a reasonable price point.
“On the advisor side, the planning software and marketing capabilities, being able to utilize people at their office — it’s all something that we didn’t really find out there when we were looking at the different options,” Flower says.
Bofford and Flower co-founded Financial Principles in 1999, per FINRA BrokerCheck records. Trout joined in 2003, the firm says.
Bofford and Flower started in the industry with W.S. Griffith in 1993 and 1996, respectively, and later moved to Park Avenue Securities in 1999, per BrokerCheck. Trout began his career at Park Avenue in 2003, per BrokerCheck.
Securities America did not respond to a request for comment on the move.