Hilltop Securities is a financial advisor firm with headquarters in Dallas, and dozens of branch offices across the country. The firm is a full-service broker-dealer and registered investment advisor (RIA). Its advisors provide investment advisory services, financial planning, consulting and retirement plan advisory services clients.
Hilltop Securities Background
Hilltop Securities opened for business in 1946 under the name First Southwest Company. In 1972, it merged with Southwest Securities, Inc., a full-service broker-dealer, and became Hilltop Securities, Inc. Today, the firm is led by chairman Jon Sobel, president and CEO M. Bradley Winges and CFO Mike Edge. Hilltop is a wholly owned subsidiary of Hilltop Securities Holdings, LLC, a financial services holding company.
All 110 of its advisors are aslo brokers and most are insurance agents. Some have professional certifications such as certified financial planner (CFP). Hilltop Securites Holdings, LLC also owns an affiliated investment advisory firm called Hilltop Securities Asset Management, LLC, which is distinct from Hilltop Securities. Hilltop Securities Asset Management serves local and state government entities and manages billions in assets.
Hilltop Securities Client Types and Minimum Account Sizes
Hilltop Securities works almost entirely with individuals. Additionally, the firm offers services to individual retirement accounts (IRAs), banks and thrift institutions, pension and profit-sharing plans, trusts, estates, charitable organizations, state and municipal government entities and corporations and other business entities.
Hilltop Securities has a minimum account size for just about all of its advisory services. They are as follows:
- Financial planning/consulting: None
- Partner Program: $30,000
- Compass UMA: $25,000
- Advantage Program: $30,000
- Premier Advisors: $100,000
- Direct Access: $25,000
- Unified Managed Account: $100,000
Services Offered by Hilltop Securities
Hilltop Securities offers a wide range of services, including:
- Financial planning services
- Tax and cash flow planning
- Insurance planning
- Death and disability
- Estate planning
- Retirement planning
- Business financial planning
- Financial consulting services
- Retirement plan advisory services
- Investment advisory and management services
Hilltop Securities offers its investment advisory services through four programs:
- The Partner program is a wrap fee program in which your advisor will act as your portfolio manager, providing a wide variety of investment choices and charging a single, holistic fee.
- The Advantage program gives you access to a non-discretionary portfolio of mutual funds and exchange-traded funds (ETFs). You and your advisor will determine an asset allocation that makes sense, and your advisor will periodically rebalance your portfolio to maintain this allocation.
- The Premier Advisors program provides access to separately managed accounts and unified management accounts (UMA). It's available through Envestnet Asset Management's online platform. You can either choose a model portfolio or an actively managed portfolio overseen by an independent money manager. With a UMA, you would choose from money managers and funds.
- The Direct Access program provides access to fund strategist portfolios that typically hold mutual funds and ETFs. Their approaches range from long-term and strategic to short-term and tactical.
Hilltop Securities Investment Philosophy
Hilltop Securities typically engages in a mix of investment strategies depending on what's best for the client. These could include long-term purchase strategies (buying a security with the intent to hold for at least a year), short-term purchase strategies (buying with the intent to hold for less than a year), short sales and options. A short sale is a transaction in which the firm will sell a stock that it has borrowed, then buy the same stock at a later date to return it to the original owner. The bet here is that the stock will go down in price between the sale and the return, allowing them to pocket the difference. In rare cases, the firm may also engage in margin transactions, but this is generally avoided.
When conducting investment research, the firm will give each representative the authority to analyze investments as they best see fit. With regard to the Advantage program, the firm has a set of criteria that a mutual fund or ETF must meet before it can be included in client portfolios.
Fees Under Hilltop Securities
The fee schedule listed here is a collection of maximum rates, and they are negotiable. Here are the fees for the Partner Program:
|Partner Program Fees|
|Account Value||Maximum Fee|
|Up to $249,999||2.25%|
|$250,000 - $499,999||2.00%|
|$500,000 - $999,999||1.75%|
|$1MM and over||1.50%|
Fees for the Advantage program adhere to the following schedule. Similarly, these fees are negotiable and serve as a maximum:
|Advantage Program Fees|
|Account Value||Maximum Fee|
|Up to $249,999||1.75%|
|$250,000 - $499,999||1.50%|
|$500,000 - $999,999||1.25%|
|$1MM and above||1.00%|
For comparison's sake, the industry average fee for investment management is 0.95%, according to a 2018 study of 1,500 firms by RIA in a Box. Learn more about advisors' typical costs here.
Financial planning and consulting fees are calculated on an hourly basis, and they can range from $250 to $500. Where it falls within that range depends on a few factors including the complexity of services, the duration of the client relationship and more.
What to Watch Out For
Hilltop Securities reported 78 disclosures of legal and regulatory issues in its latest filings with the Securities and Exchange Commission (SEC). Of them, 47 involved Hilltop Securities itself and the remainder involved either an affiliated individual or affiliated firm. These disclosures have to do with, among other things, issuing materially misleading information surrounding the offering and selling of certain municipal securities; incorrectly guaranteeing the purchase of common stock in connection with the purchase of bonds; and an incomplete response to a subpoena by the Illinois Department of Securities. Hilltop Securities has paid fines that range from $250 to $8 million.
Also worth noting: as mentioned before, advisors at Hilltop Securities are all brokers and most are insurance agents. In these non-advisor roles, they earn transaction-based fees or commissions, which can present a potential conflict of interest. That said, as an SEC-registered firm, Hilltop Securities has a fidiuciary duty to work in clients' best interests at all times.
Opening an Account With Hilltop Securities
To find an advisor near you, you can call (800) 562-8041. Alternately, you can fill out the contact form on the firm’s website with your name, email address, phone number and a brief message.
All information is accurate as of the writing of this article.
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