The Principles One Man Used to Innovate Financial Services Elliot Weissbluth started HighTower to put clients before products. And he did it in the middle of a recession.
By Tracy Byrnes •
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Many will call him a distruptor.
But he and I both agree that word is being used much too liberally these days.
And, while he is one, there are more appropriate "D" words you could use to describe Elliot Weissbluth, founder and CEO of HighTower Advisors.
Like:
- Dyslexic
- Debate Team Member
- Daring
- Discontented
The former debate team member overcame dyslexia and was daring enough to use his discontent for the financial advisory industry to create HighTower Advisors, an advisor-owned financial services firm, back in 2008.
Say that 10 times fast.
And then learn from it. Adversity, dissatisfaction and compassion are the things that great people use to implement even greater ideas. In the end, that experience helps shape three core beliefs.
1. Don't Blame the System
"Blame is a wasted emotion," says Weissbluth. "The world is just not fair so move on."
Divorce yourself form passion and righteousness. Only then can you begin to understand the rules of the system. And then you can figure out how to change them.
Weissbluth says he is a huge fan of Uber, because they didn't create anything new. They understood how the system worked and they just figured out how to do it better. They put the client – not the cabs – in the center of the experience.
That's the same overriding principle that he used to create HighTower. He wanted the client in control.
Back in 2008, the financial advisory industry was in disarray. After years of great returns, clients watched in dismay as their nest egg disappeared. So finally, they started analyzing their monthly statements, only to find they were filled with extraneous fees and products they didn't understand.
"There was a complete lack of transparency," says Weissbluth.
But unfortunately, that's part of the business. The big financial services firms create -- or manufacture, as Weissbluth says -- products that financial advisors need to sell to generate company revenue. (Watch this white-board Youtube video about manufacturing products). But then clients don't have much say and often overpay for products they may not want or need.
But that, in turn, keeps the bank or brokerage house in control.
Weissbluth wanted to give clients that control. And instead of trying to change the business, he created a solution for it -- right in the in the middle of an economic recession.
In very simplified terms, he established HighTower as a place that charges only for advice, because they don't make – or manufacture – anything.
Instead the firm invites banks and brokers to come and offer their products at competitive prices to HighTower clients.
"We have caused the entire marketplace to compete for our business," says Weissbluth, who now has more than $30 billion in assets.
Think of it as Kayak in the travel world. Kayak didn't change the airline business. It just forced airlines to offer more competitive rates. HighTower is doing the same thing (with decidedly less air-sickness).
Related: Tony Robbins: Could Moving Be the Answer?
2. Let Your Discontentedness Lead You.
"That persistent feeling of discontentedness is the mark of a true entrepreneur," says Weissbluth. "I wake up every morning and my brain goes to the three things we have to rebuild and fix, not the stuff we did right."
Because, let's face it, clients and customers don't want to hear you brag about your successes. Quite honestly, no one does, except maybe your mother.
Real entrepreneurs don't rest on their laurels. hey have a constant need to keep improving, to keep doing right by their clients.
Because winning at all costs is not true leadership. Weissbluth knows that all too well. He was a litigator early in his career but eventually left the profession because it got too hard. "I couldn't put winning above the fact that my cases should have lost," he says.
Caring matters. And if you don't care, it catches up. Just ask Bernie Madoff or Martin Shkreli.
Weissbluth was discontent with the way clients were being treated in the financial-services world. So he set out to put the client first.
You should do the same. And the money will come. (Just ask Derek Jeter.)
Good people really do win.
3. Understand that Wellness is Not Just a Fad.
"El Nino, Isis. The anxiety level of people is rising," says Weissbluth
People are more concerned about their overall wellness than ever before. The stresses of today's society can cause disease, depression, even suicide. And that includes financials stress.
Many of us know it well. It sucks, quite frankly.
Weissbluth offered two sobering stats:
1. 80 percent of people under 45 are more fearful of running out of money than dying. (So dead is better?)
2. 20 percent of men would give up sex for financial stability. (Seriously?)
And we all know that financial stress is a huge reason for divorce, regardless of income levels.
Because at all levels, many of us live beyond our means or are faced with unforeseen expenses that just cause exorbitant amounts of worry.
So helping people improve their financial wellness has become a personal mission for Weissbluth. And he aligned himself with the great motivator Tony Robbins to help do just that.
So maybe consider how you can improve you customer's wellness. Because I think the takeaway here is that being a good person and caring translates into revenue.
The world has become a scary place and if you can offer a product or service that makes me feel a little better, I know I'm a buyer.
I'm pretty sure Weissbluth would be, too.
