A cofounder of Graystone Consulting, Morgan Stanley’s wealth management business that caters to institutions and wealthy individuals, has left the group to start his own independent advisory firm.
Phil Shaffer announced his new firm, called Halite Partners, earlier this month. He will serve as CEO, while Norm Cook, also a consultant at Graystone, will be president and chief marketing officer.
The firm will serve institutions as well as ultra-high-net-worth individuals and will be headquartered in Columbus, Ohio. It already has an additional office in West Palm Beach, Florida, and is soon opening another in Naples, Florida.
Halite's two executives say there aren’t enough advisory firms providing high-quality wealth and investment management.
“Just in the last few weeks with the high-net-worth individuals that we have brought in, either their investment portfolio is a disaster but the wealth management is OK, or it’s vice versa,” Cook said.
They believe there is opportunity to bring a level of investment management typically reserved for institutions to ultra-high-net-worth individuals and families, along with high-level planning.
“There is a hole in this service industry,” Shaffer said. “There is not an institutional-investment mindset on the investment side.”
Shaffer researched the RIA business model for a long time prior to founding Halite Partners. While doing so, he was most impressed with the technology in the independent space and called it “superior” to what was available to him previously. That coupled with fee compression in the institutional advisory space are what led him to start his own firm, he said.
An example of technology Shaffer and Cook are looking forward to is improved portfolio-exposure analysis. What previously took hours of work for their team will now be done much faster, freeing up time to dedicate to clients in another capacity.
Shaffer has consistently been recognized as one of the country’s top advisors for institutions, including foundations, endowments and family offices. Barron’s ranked him the 13th in 2017 against his peers based on the Graystone Consulting team’s $4.5 billion institutional client assets under management. They expect to bring over the majority of their clients to Halite Partners.
Tim Oden, senior managing director of business development at Schwab Advisor Services, said the independent space did not attract advisors like Shaffer 20 years ago. While the space has been mature for a long time, Oden said he has long anticipated there would be an inflection point—when top advisors at traditional brokerages would begin seeing it as a better choice.
“Advisors moving from more traditional models to the independent model—it’s not a trend, it’s a movement,” he said.
"We have long said that technology is the catalyst for these departures,” said Brian Hamburger, founder of MarketCounsel and The Hamburger Law Firm. “It’s what's enabling them to leave and go toe to toe with the firms that they left.”
Morgan Stanley could not be reached to comment on Shaffer’s departure.