Phil Shaffer Folds His Breakaway Shop, Joins Larger RIA
Phil Shaffer, a former mainstay of Morgan Stanley’s Graystone Capital business servicing family offices, endowments and small pension funds, is closing the independent firm he founded 17 months ago in Columbus, Ohio, to join a larger wealth management firm.
The 62-year-old industry veteran became a managing director in charge of “institutional services” at Hamilton Capital three weeks ago, he said. The 70-person registered investment advisory firm, founded 21 years ago by Matthew Hamilton in Columbus, employs some 25 advisors managing more than $2.4 billion for some 2,100 clients, according to its website and regulatory filings. It is based in the same building as
Halite Partners, the firm Shaffer is shuttering.
Halite was managing about $110.6 million for fewer than five pension and profit-sharing plan clients as of the end of March, and had a staff of 12, according to its most recent Form ADV. At Morgan Stanley, Shaffer’s team had reportedly managed more than $3.5 billion with clients who had an average of $125 million of assets.
“Running a business was expensive,” he said, noting Halite’s need to hire front- and back-office personnel and vendors. “Matt convinced me they can supply the planning, compliance and H.R., and I can do the investments and still be an equity owner.”
The decision to shutter Halite highlights the challenges of going independent for advisers used to support from a big firm. “It’s painful from an ego point of view,” said Shaffer, who began his career at E.F. Hutton in 1980 and also has worked at PaineWebber, Lehman and Smith Barney.
But he said he has no regrets about his decision to leave Morgan Stanley in June 2017, and continues to champion the RIA business model as freer of conflicts for clients than that of broker-dealers.
Shaffer has excoriated his former firm’s requirement that money managers pay hundreds of thousands of dollars to qualify for its approved list. The fees, which he said Morgan Stanley escalated after buying Smith Barney, are often prohibitive for small portfolio managers that can generate more “alpha” than many larger firms, he said.
Similar arguments have been made over the years by brokers at other wirehouses who service the retail brokerage industry’s “institutional” sector, a niche that was created at E.F. Hutton and that Shaffer said he helped introduced to Smith Barney.
Joining Shaffer from Halite is his son Josh, and Britton Cotton, who works on sales from Palm Beach, Florida.
The veteran advisor said he plans to help his new boss expand into other cities by adding small RIA practices or brokers, with the goal of quadrupling Hamilton’s assets under management within about three years to some $10 billion. Hamilton uses Charles Schwab as its primary custodian, while Halite used BNY Pershing as well as Schwab.
Hamilton, which has an investment team of nine analysts and portfolio managers led by former Nationwide Financial Services Chief Investment Officer Tony Caxide, wants to integrate culturally compatible advisors rather than be an “aggregator” buys firms’ revenue, Shaffer said.