Hightower is a well-capitalized company backed by several outside institutional investor groups. That includes Red Eagle Ventures, a private-equity firm led by David Pottruck, the former CEO and president of Charles Schwab and a current Hightower board member.
To date, BHWM has been funded solely by Black-Scott. The company is currently in a "friends and family" round of capital raising, and will begin sourcing additional investment capital in six to 12 months.
"I see smaller independent advisor firms attempt to re-create that [Hightower-like] model all the time, whether they have grand ambitions to be a national firm or are simply trying to develop a regional or super-regional strategy," says David Selig, CEO of Advice Dynamics Partners, an M&A consulting firm in Mill Valley, Calif.
"It's a common refrain: Build a better mousetrap and the disenfranchised will come," he continues. "But you need to have a very compelling pitch that helps you differentiate yourself, maybe not from a Hightower, but from an RIA down the street trying to do the same thing."
For BHWM, whose office is in the heart of Beverly Hills on Wilshire Boulevard near its intersection with Rodeo Drive, its goal is to hire two or three additional advisors by year-end. It aims to have from $80 million to $100 million in revenue in five years. "Based on the plan we've put together, we believe we can do that with a steady growth trajectory," Black-Scott says.
She adds BHWM is working on expansion opportunities in different cities around the country, but wants to grow carefully to make sure they get it right. "We don't want to get ahead of ourselves," she says.
For now, BHWM is relying on Black-Scott's industry contacts--as well as word-of-mouth referrals--to expand its advisor base. She says they'll eventually hire recruiters to attract new talent.