Hightower Advisors, LLC (“HTA” or “Hightower”) is an investment advisory firm registered with the U.S. Securities and
Exchange Commission (“SEC”), and a wholly owned subsidiary of Hightower Holding, LLC. Detailed information about
Hightower is available in its Form ADV, Part 2A (“Firm Brochure”). Hightower is also affiliated with an SEC-registered
broker-dealer, Hightower Securities, LLC (“HTS”), and several SEC-registered investment advisors. Please refer to Item
10 in our Form ADV, Part 2A (“Firm Brochure”) for a list of those affiliates.
Clients may select from a variety of investment management services, including portfolio management (implemented by
HTA, or an independent, third-party money manager), investment consulting, financial planning, and estate planning. HTA
provides services to clients through individuals registered as investment adviser representatives, who are referred to
internally as “Financial Advisors.” HTA’s Financial Advisors may be specialists in areas such as wealth management,
investment consulting, portfolio management, asset allocation, cash management/treasury services, financial planning,
and/or estate planning.
This Form ADV Part 2A, Appendix 1- Wrap Fee Program Brochure is offered to potential and existing clients to provide an
understanding of available programs sponsored by Hightower and its related conflicts of interest. Clients typically include
high and ultra-high net worth families as well as individuals, businesses, pension and profit-sharing plans, trusts, estates
and charitable organizations, corporations or other business entities, and institutional clients.
Clients are advised that the same or similar programs or services as those described herein may be available from other
investment Advisors for an annual fee lesser or greater than set forth herein, and that the programs described in this brochure
may cost the client more or less than purchasing the different services within each program separately depending upon such
factors as trading activity, account size, portfolio management fees, mutual fund no-load or load charges, etc.
Financial Advisors will be reasonably available for consultation with clients regarding the management of their account. HTA
will provide necessary financial information to the Money Manager including material changes provided by the client as
needed.
Hightower Advisors, LLC Sponsored Program (“Advisor Directed Program”)
A. Program Description
This section describes the Advisor Directed Program offered by HTA. The minimum amount of assets required to participate
in the Advisor Directed Program is generally $100,000, subject to negotiation. Each client participating in the Advisor Directed
Program enters into an agreement with Fidelity, Charles Schwab (“Schwab”), TD Ameritrade or Pershing Advisor Solutions
(“Selected Custodians”), the clearing and custodial firms selected by HTA. HTA has an agreement with the Selected
Custodians that sets forth the services that HTA will provide the client and the fee the client will pay. HTA also has agreements
with the third-party Money Managers chosen to participate in the Advisor Directed Program. The Selected Custodians provide
execution, custody, and administrative services to HTA. Securities and/or cash designated by the client for inclusion in the
Advisor Directed Program are maintained in one or more accounts held at a Selected Custodian.
Clients in the Advisor Directed Program generally grant HTA authority to manage their accounts on a discretionary basis in
accordance with the client’s investment objectives, risk tolerance and investment time horizon, subject to any
reasonable restrictions that the client has provided to HTA in writing. The client’s financial advisor will be responsible for making
investment decisions for the account on HTA’s behalf. Pursuant to this grant of discretion, clients authorize HTA to invest in
securities and other investments, at the time and in the manner that the financial advisor determines, and to act on the client’s
behalf in all other matters necessary or incidental to the handling of the account, without discussing these transactions or actions
with the client in advance. The specific terms of the investment advisory relationship between each client, HTA and the financial
advisor are set forth in the Client Advisory Agreement.
Program accounts utilize an individual investment style and strategy in accordance with each client’s financial situation and
investment objective for the Advisor Directed Program account. If a third-party Money Manager is selected, its investment style
and strategy will also be chosen in accordance with the client’s financial situation and investment objective for the Advisor Directed
Program Account.
Transactions in Advisor Directed Program accounts generally are executed through unaffiliated broker-dealers, including Schwab,
Fidelity, TD Ameritrade, or Pershing Advisor Solutions. Third-party Money Managers must meet certain requirements as
established by HTA and as determined through HTA’s due diligence.
Any restrictions on the management of the Advisor Directed Program account imposed by the client or by such written investment
policies or guidelines may cause HTA or the Money Manager to deviate from the investment decisions it otherwise would make
in providing services under the Advisor Directed Program. HTA will have no liability for a client’s failure to provide HTA with
accurate or complete information or to inform HTA promptly of any change in the information previously provided.
Financial advisors and Money Managers will be reasonably available for consultation with clients regarding the management of
their account. HTA will provide necessary financial information to the Money Manager including material changes received from
the client as needed.
B. Wrap Fee
Clients in the Advisor Directed Program pay a fee that covers, among other things, services provided by the custodian and
services provided by applicable Money Manager(s) (a “program fee”). Clients also pay advisory fees to HTA for the services
it provides. The program fee and the HTA advisory fee are bundled into one fee (the “Wrap Fee”). The Wrap Fee covers
investment advisory services, execution of transactions, custody with Selected Custodians, and reporting.
C. General Fee Items
HTA, in its discretion, may negotiate the fee (and the rate of any other fees charged by HTA for services not covered by the
Wrap Fee) in appropriate circumstances, based on a number of factors including, but not limited to, the type and size of the
account, the size or number of trades anticipated to be executed for the account, services provided to the account, the client’s
other accounts with HTA, and the accounts of the client’s family with HTA. Wrap fees charged generally are less than or
equal to 250 basis points (2.5%). The fees applicable to the wrap account may be higher or lower than the fees that HTA
charges other clients in this or other programs and may be higher or lower than the cost of similar services offered through
other financial firms when considering the unbundled cost of the services provided and the transaction costs the account
would otherwise have been expected to cover. The account may be subject to a minimum fee specified in the Client Advisory
Agreement.
In connection with the Advisor Directed Program, Financial Advisors may utilize an investment strategy that generally seeks
investments that are long term in nature with a buy and hold bias. Due to the nature of these strategies, investments in
accounts could incur low position turnover. However, the client continues to pay the Wrap Fee regardless of the number of
transactions incurred in the account. Client should also be aware that services similar or comparable to those provided to
them might be available to the client at a lower aggregate cost elsewhere on an “unbundled” basis.
The Wrap Fee does not cover brokerage commissions or other charges resulting from transactions not effected through the
qualified custodian broker-dealers, nor does it cover custody services provided by any non-core custodian. The Wrap Fee
does not cover certain costs or charges that may be imposed by HTA or third parties, including, but not limited to, costs
associated with exchanging foreign currencies, odd lot differentials, activity assessment fees, transfer taxes, exchange fees,
wire transfer fees, postage fees, auction fees, foreign clearing, settlement and custodial fees, and other fees or taxes required
by law. The Wrap Fee does not cover “mark-ups” or “mark-downs” that broker-dealers may receive or “dealer spreads” that
other broker-dealers may receive when acting as principal in certain transactions. The Wrap Fee also does not cover the
annual fee that qualified custodians charge Individual Retirement Accounts or certain other retirement plans. Costs
associated with using margin are not covered in the Wrap Fee and may result in additional compensation to HTA and the
Financial Advisor representative. As such, Financial Advisors are subject to a conflict of interest in recommending that
advisory clients open margin accounts and maintain debit balances.
The financial advisor or the Money Manager may invest account assets in open-end mutual funds (including money
market funds), closed-end funds, exchange traded funds (“ETFs”), and other pooled investment vehicles that have
various internal fees and expenses, which are charged by such funds and are ultimately borne by the client as an
investor.
Besides general equities and fixed income securities, financial advisors and money managers may employ strategies that
utilize the following types of investments: (i) American Depository Receipts (“ADRs”), which are receipts issued by a
U.S. bank or trust company that evidence ownership of non-U.S. securities and are traded on a U.S. exchange or in the over
the counter market; (ii) Global Depository Receipts (“GDRs”), which are receipts issued generally by a non-U.S. bank or trust
company that evidence ownership of non-U.S. securities; (iii) World Equity Benchmark Shares (“WEBS”), which are shares
of Foreign Fund, Inc., an open end investment company organized in series, each of which invests primarily in non
U.S. common stocks in an effort to track the performance of a specified foreign country equity market index compiled by
Morgan Stanley Capital International (“MSCI”); or (iv) closed end investment companies that invest a substantial portion of
their assets in the securities of specified foreign countries (“closed end country funds”). Clients will bear, in addition to the
Wrap Fee, a proportionate share of any fees and expenses associated with these securities, if applicable, in which account
assets are invested, and may also bear any fees and expense associated with converting non-U.S. securities into ADRs or
GDRs, if applicable.
A portion of the Wrap Fee is paid to the financial advisor. The financial advisor receives compensation as a result of the
client’s participation in the Advisor Directed Program, and the amount of this compensation may be more or less than what
the financial advisor would receive if the client participated in other HTA or affiliate’s programs or paid separately for
investment advice, brokerage, and other services. The financial advisor may have a financial incentive to recommend the
Advisor Directed Program over other HTA or affiliate’s programs and services.
The Wrap Fee is an agreed upon annual fee that will be payable quarterly in arrears. This determination will be made and
disclosed at the time of the client advisory agreement signing. Billing for the quarter will be in arrears or advance and based
on the average daily balance and the number of days assets are in the Account(s), or for the billing period ending balance.
Please refer to the Firm Brochure, Item 5 for billing practices.
Transactions in the account may be effected through the client’s chosen custodian, unless otherwise required by
applicable law. When a transaction is executed through the client’s qualified custodian the custodian will be entirely
responsible for the execution and clearance of the transaction.
D. Additional Fees
Hightower complies with its duty to seek “best execution.” However, a client may pay a commission that is higher than the
commission another qualified broker-dealer might charge to effect the same transaction where Hightower determines, in good
faith, that the commission is reasonable in relation to the value of the brokerage and research services received. In seeking
best execution, the determinative factor is not the lowest possible cost, but whether the transaction represents the best
qualitative execution, taking into consideration the full range of a broker-dealer’s services, including among others, the value
of research provided, execution capability, commission rates, and responsiveness. Consistent with the foregoing, while
Hightower will seek competitive rates, it may not necessarily obtain the lowest possible commission rates for client
transactions.
In addition, HTA may receive certain products and services from broker/dealers that are customary in the course of an
institutional brokerage relationship. To the best of Hightower’s knowledge, these services are generally made available to
all institutional investment advisers doing business with these broker/dealers. These bundled services are made available
to Hightower on an unsolicited basis and without regard to the rates of commissions charged or paid by clients or the
volume of business directed to these broker/dealers. Since these products and services are merely made available by
broker/dealers as part of a bundled business package to Hightower, Hightower does not consider products and services
received in this context to be “soft dollars.”