Bahnsen Group to acquire $1.1 billion Hightower Naples under its franchise model

The Bahnsen Group, the $10.5 billion advisory firm Hightower acquired in April, has agreed to take on Hightower Naples, a $1.1 billion practice in Naples, Fla., in the first acquisition struck under the franchise model Hightower is building around its operating hubs. WealthManagement.com first reported the deal, which is expected to close at the end of the year and would give Bahnsen its second Florida location.

Both sides of the transaction sit under the same parent, with Hightower Naples one of Hightower's own advisory practices and Bahnsen, in the six months since its acquisition, positioned as a hub where other firms get folded in. To count this first franchise deal as the purchase of an outside business would overstate what Hightower added this week. The roster of firms and the client assets under the platform carry over unchanged; what is new is a structure for moving practices between them.

Larry Restieri, Hightower's chief executive, said he expects his firm to create additional hubs in the future while it continues building out the Hightower Signature Wealth RIA channel, which he said he and his team have grown to more than $35 billion in client assets. How the hub and the channel divide the work among the practices they take on is not spelled out, leaving the strategic boundary between the two structures still to be drawn.

David Bahnsen, the founder and managing partner, took the firm out of Morgan Stanley in April 2015 with eight other team members and $600 million in assets, with transitional support from Hightower behind the move, and opened a satellite office in New York City two years later. The firm has since grown to $10.5 billion with 13 locations and 100 employees in markets that include New York, Nashville, Tenn., and Palm Beach, Fla. A relationship that predates April's acquisition by about a decade makes this look less like a new pairing than the formal step in an old one.

The Naples practice brings $1.1 billion across more than 100 client relationships — high-net-worth families, business owners, senior executives and professional athletes — an average of about $11 million per client at the outside, and a book of that shape tends to get underwritten on retention rather than growth. David Emma and Mark Masterson, the managing directors and partners who founded the practice, left Merrill Lynch in 2011 in the wirehouse-to-independence move this publication has covered.

In a statement, Masterson described the combination in the terms sellers of advisory practices tend to use: "This combination creates new opportunities for our clients and our team," adding that Bahnsen's "investment capabilities, national reach and commitment to growth make it the right partner for our next chapter."

If it closes at year's end as expected, the $1.1 billion lifts Bahnsen's assets by roughly a tenth, an increment that normally arrives through years of recruiting or the purchase of an independent firm and here rides on a parent moving a practice between two entities it already owns. No purchase price is public to test the arrangement against, leaving the price, the consideration and the retention terms unstated.

The financing logic behind the hub model is not hard to find. Hightower bought Bahnsen in April, and it now has a management team buying practices for it, which is cheaper than standing up a corporate development desk that understands advisory economics, and it leaves the integration risk with the operator that has the most to lose if clients walk.

Cadence may be the point. Bahnsen announced a transaction in late September, and Restieri says more hubs are coming; a model that depends on hubs buying repeatedly needs a steady pipeline, which puts practices already sitting inside Hightower next to outside sellers on the list.

The seller side is widening anyway: Fidelity's mid-2027 deadline for RIA clients below $100 million in assets has made sub-scale firms into sale candidates, and acquirers have been paying for the capacity to absorb them more than for the assets themselves, as this publication has argued. Buying a firm that already runs a platform and letting that firm buy is one way to manufacture integration capacity instead of hiring it.

Bahnsen expects to announce more additions in the coming months, with the Naples deal due to close at year's end. Whether the next franchise acquisition comes from inside Hightower's own roster, as this one did, or from the independent market will show how far the hub model travels past its first test.