HighTower signs first adviser to new platform

Shaffer Wealth Management has become the first financial advisory firm to join the HighTower Network — a platform that gives breakaway advisers access to the RIA partnership’s resources, but allows them to maintain control over their own practices.
Robert Shaffer is managing director of the newly created firm. He formerly managed $300 million in assets at SunTrust Investment Services Inc., and had previously worked at Merrill Lynch & Co. Inc.
“I’ve worked at a big broker for 10 years and at a big bank for 10 years,” he said. “I’ve seen a lot of models and platforms in the industry, and the more due diligence I did, the more I was impressed with HighTower.”
To date, the HighTower business model has been to buy advisers’ practices with upfront money and equity in the HighTower partnership. The firm has been one of the fastest growing RIAs in the country, now managing more than $20 billion in assets.
With firms such as Dynasty Financial Partners LLC and Focus Financial Partners LLC attracting advisers by offering them a higher degree of independence, HighTower last September decided to offering two new relationship models: the HighTower Network and the HighTower Alliance.
The HighTower Network offers advisers the same platform and resources that regular advisers with the firm get, but, for example, Mr. Shaffer and the two SunTrust colleagues who are joining him, will retain full ownership of their firm, headquartered in Atlanta. The relationship is governed by a services agreement, said Mike Papedis, executive vice president of business development at HighTower.
“This is an independent contractor relationship versus the employee channel,” said Mr. Papedis. “Network advisers have full access to HighTower’s capabilities, but they receive no equity in HighTower and keep full control over their own firms.”
The HighTower Alliance model offers advisers even more independence, allowing them to handle more of the day-to-day operations of their firms while accessing HighTower’s investment platform and broker-dealer services.
Mr. Papedis said Network members pay approximately 20% of their revenue to HighTower, while Alliance members pay about 10%. The firm has yet to sign up any advisers to the Alliance platform.
“We understand that the partnership model is not for all financial advisers,” Mr. Papedis said. “They can now find the best affiliation that meets their practice needs — and it enables us to expand our reach.”
Mr. Shaffer said the more flexible terms offered by HighTower last year sealed the deal for him. “HighTower has done an amazing job building its platform, but the partnership was the only path to working with them,” he said. “We wanted a little more autonomy, and when they launched the two new channels, they elevated to the top for me.”
Shaffer Wealth Management is the fifth adviser team to join HighTower this year, and the 13th team to join in the past 12 months, according to Mr. Papedis.