CHICAGO -- While HighTower goes after the crème de la crème of high-end wirehouse advisors, CEO Elliot Weissbluth dismisses the Wall Street giants who currently employ them -- as well as any big firms that provide both products and advice.

"The biggest challenge will be for firms who are at their core manufacturers and/or distributors masquerading as service providers," Weissbluth said during a roaming conversation about leadership, industry challenges and what lies ahead with former Vanguard CEO Jack Brennan and moderated by CNBC's senior editor at large Jim Pavia.

In a follow-up conversation during the Chicago-based platform provider's Apex conference this week, Weissbluth explicitly called out the major Wall Street wirehouse firms as "masqueraders," noting that they would be forced to change their business models as the trend toward fee-based, fiduciary advice continues.

Firms that both sell products and provide services "will be under attack" by firms like HighTower that adhere to a fiduciary standard, as well as market forces as investor demand changes, Weissbluth said. "You can't be a fiduciary and make money off products."


Weissbluth also sees no future for small, unsophisticated advisors, arguing that there are too many advisors at the lower end of the spectrum who are likely being overcompensated for the value they offer clients. "There will be a weeding out of the mediocre advisor," he said.

That hasn't happened yet, Weissbluth says, because of asymmetry in the market: Wall Street has simply had far more marketing ammunition than the "ma and pa shops" who can't afford to market "because it takes away from their take-home economy." As a result, he said, investors haven't known where to get good financial advice. 

Although both Weissbluth and Brennan acknowledged challenges facing the industry -- Brennan pointed to the lack of investor confidence and potential regulatory changes -- they are bullish on the need for human advisory services.

"There's a premium on advice when there is a situation that causes complexity," whether it is a downturn in the market or a significant change in a person's life like divorce or retirement, Weissbluth said. "Robo advisors can't do it and mediocre advisors can't do it."

While innovation in technology and the proliferation of online advice options will push firms like HighTower to figure out ways to be even more efficient and will provide investors with education about the help they need, eventually clients will need a human advisor, Brennan said. "I'm one of the biggest bulls out there on the human advisor."

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