RENO, Nev., July 31 — Six wealth management organizations launched stand alone trust companies this year despite the financial slump, according to regulator filings.
Most recently, former Morgan Stanley wealth manager Daryl Bank and his partner Greg Bodoh announced last week to The Trust Advisor they have been approved to launch Dominion Trust Company in South Dakota. Dominion Trust will offer full trust company services from their office in Virginia. This will include money management, personal trust services, retirement planning, and alternative investments.
This marks the fourth South Dakota trust company start-up for the year according to the Regulator’s website. Last March, Dallas based wealth manager Christopher Holtby and four other advisors launched Wealth Advisors Trust Company (www.wealthadvisorstrust.com) to serve their clients and outside advisors.
Advisors setting up their own trust companies can provide all the trust services qualified plans—401(k)s, 403(b)s and others—require. Advisors with their own trust company also can provide services for special purpose trusts such as dynasty trusts, asset-protection, revocable, and irrevocable trusts. Finally, advisors who set up trust companies can serve as IRA custodians for most assets including alternative investments such as private placements and real estate.
In an effort to cut down on hefty start-up fees and ongoing support charges, many independent advisors are relying on the expertise of firms like Reno, Nevada-based Garrison Institutional Services (www.garrisonnevada.com). Garrison helps advisors determine whether a trust company can complement their current service offerings and, if so, assists them in applying for a trust company license. Garrison also arranges operational assistance.
Garrison assisted Saturna Capital in the licensing of Saturna Trust Company (www.saturnatrust.com) in Nevada earlier this year. Saturna Trust a unit of Saturna Capital Corporation based in Bellingham, Wash. They serve as investment adviser and administrator to over $1 billion in assets in the Amana Mutual Funds Trust and the Saturna Investment Trust.
“Clients want just one store, one relationship to protect everything,” says Jerry Cooper, relationship manager at Garrison. “We help advisors to wear two hats: owning their own RIA business and owning a trust business.” Cooper added, “Considering an advisor is doing two jobs that overlap—he can charge less for both. Clients like receiving lower trustee fees and are more inclined to stay put because they know they are receiving a great deal.”
Besides Garrison’s contribution, other advisor-owned trust company launches include Evercore Trust Company (www.evercoretrustcompany.com). According to the company announcement, Evercore Trust will have $12.8 billion in assets under management and administration and will provide specialized investment management, independent fiduciary and trustee services.
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