We recently ran a commentary, “Will the Real Butchers Please Stand Up?” Our commentary was in response to the viral whiteboard video, “Brokers vs. Fiduciaries” that was produced by Chicago-based HighTower Advisors. The video, which was narrated by HighTower’s CEO Elliot Weissbluth, poked fun at brokers, portraying them as careless butchers, and contrasted them to registered investment advisors (RIAs), highlighting the delicate fiduciary duty that advisors owe investors.
The video did a good job illustrating in an entertaining way the different regulatory standards that brokers and RIAs owe their clients. In our commentary, we highlighted the point that HighTower, like many advisory firms today, is “dually registered” as both an RIA and as a broker dealer.
We heard from Mr. Weissbluth and he addressed our concerns regarding possible conflicts of interest that can arise when dealing with dually registered firms. We’re the first to recognize that the fiduciary standard is the holy grail of investor protection. But, we’ve always maintained that the fiduciary standard (which is based in legal theory) is only as good as the advisor’s understanding and compliance with it.
After speaking with Mr. Weissbluth, we have no doubt that he has a solid command of his firm’s fiduciary obligations. Mr. Weissbluth detailed for us the safeguards that HighTower has in place to protect investors from these conflicts. See HighTower’s full response here.
We enjoyed our interaction with Mr. Weissbluth, and next time we’re in the Windy City we hope to catch up with him over a nice juicy steak dinner.