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ON THE MOVE-HighTower lands $600 mln team from Morgan Stanley
July 16, 2012 / 7:04 PM / 5 years ago

ON THE MOVE-HighTower lands $600 mln team from Morgan Stanley

July 16 (Reuters) - HighTower Advisors LLC, an independent broker-owned firm that has grown by hiring from top U.S. brokerages, landed a veteran team from Morgan Stanley Smith Barney that managed $600 million in client assets.

Advisers Eugene Lerner, Walter Gondeck and Mingdong Tan, of The Lerner Group joined HighTower on Friday from Morgan Stanley Smith Barney. For the Chicago-based team, the move is a return to their independent roots, where Lerner began his advising career running his own firm, Disciplined Investment Advisors.

At HighTower, the team is able to work with several independent securities holders, or “custodians,” such as Charles Schwab, Fidelity and JP Morgan, instead of keeping all of their clients’ assets with one custodian - a common practice at the brokerages of big firms.

“I think the fact that we have outside custodians means that it will be like the old days at DIA (Disciplined Investment Advisors),” said Lerner, who spent more than 20 years as president of DIA. “The vision is to be a bit old-fashioned, to rely on competition among multiple custodians.”

That third-party independence has attracted many veteran advisers to firms like HighTower, which has grown by hiring breakaway brokers who want to be free from any pressure to sell proprietary bank-owned products to their clients.

The Lerner Group started at Morgan Stanley about a decade ago, later moving to Citigroup’s Smith Barney in 2008, only to rejoin the firm one year later after Morgan Stanley’s wealth unit merged with Citi’s Smith Barney in 2009.

They are the seventh new adviser team this year to join HighTower, which was founded in 2008. The advisers joined HighTower as managing directors and partners, opening a new office in Chicago’s North Shore area.

HighTower has also added advisers in Arizona, California, Maryland, New York and Virginia this year, from firms including Bank of America’s Merrill Lynch and Morgan Stanley Smith Barney.

Mike Papedis, executive vice president of business development at HighTower, told Reuters in March that the firm had 70 percent more advisers and team transactions in 2011 than in 2010. HighTower completed 10 transactions last year, and Papedis said he expects the firm to increase that number this year.

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