CHICAGO, July 21, 2016 /PRNewswire/ -- HighTower recently announced findings of its inaugural industry benchmarking study. The proprietary study examines quantitative practice characteristics and key metrics, including profitability, productivity and team composition to reveal differences between HighTower advisors overall, HighTower's top performers, and independent RIAs.
"Advisors in the HighTower community have unique access to several competitive differentiators that fuel growth," said Michael Parker, Chief Development Officer at HighTower. "From the collective wisdom of our elite community to the efficiency and cost-savings inherent to our scale, sophistication and infrastructure, the HighTower model delivers a quantifiable edge over the industry at large."
"The new study complements our groundbreaking Blueprint for Growth initiative," added Mr. Parker. "It provides a quantitative comparison of HighTower teams against the general independent RIA population—and reveals the areas where our advisors excel and why they are industry leaders."
HighTower practices are larger. The study confirms that HighTower practices are larger—both in assets and revenue—than industry top performers in general. The median AUM for independent top-performing advisory practices is $280 million, and the median revenue for top-performing independent advisory practices is $2.4 million (source: InvestmentNews, 2015 Advisor Compensation & Staffing Study). The median AUM for HighTower practices is $653 million overall and $868 million for top performers, nearly 133% and 210% larger, respectively, than industry averages. Median revenue for HighTower practices is $3.5 million overall and $6.2 million for top performers—nearly 46% and 158% more revenue, respectively.
HighTower practices are more productive and profitable. HighTower advisors grow and scale their businesses with fewer staff, greater focus on managing assets and generating revenue, and with greater efficiency than industry peers. On average, HighTower teams have only approximately 6 full-time employees, with top performers employing approximately 10 people. The average industry practice size is more than twice the average HT practice, requiring approximately 14 full-time employees (source: InvestmentNews, 2015 Advisor Compensation & Staffing Study).
HighTower practices have lower cost structures. HighTower practices have lower overhead and expenses than independent RIAs. HighTower advisors' average cost structure is approximately 49% of revenue (top performers operate at 46%) compared to the industry average of approximately 54%. The 6% of operating efficiency compounds into greater earnings when applied to a faster top-line growth rate (source: InvestmentNews, 2015 Advisor Compensation & Staffing Study; includes direct and overhead expenses, but excludes owner compensation).
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HighTower is a national firm built by and for elite financial advisors. HighTower advisors commit to the fiduciary standard: a binding promise to put our clients' interests first. Powered by a proprietary technology and investment platform, HighTower embraces bold change to create a culture of collaboration and growth and to meet the evolving needs of sophisticated investors. For more information, see www.hightoweradvisors.com and www.byadvisorsforadvisors.com.