Posts Tagged Antony Joffe
Wealthy Say Money Is Safer in the US Than Europe
Posted by Scott Martin in News on October 2, 2011
Between the euro’s malaise and new IRS headaches for holders of foreign accounts, Americans and others are handing their money back to institutions operating on U.S. soil.
As the euro lurches from crisis to crisis and the world’s economic outlook stutters, rich families and institutions have shifted a net $1 trillion into U.S. checking accounts over the last three years.
And with stricter documentation rules on the horizon, the drive to empty out foreign accounts is translating into big business for onshore trust companies.
“We are seeing a big increase in U.S. citizens who have foreign bank accounts moving them onshore,” says Antony Joffe, head of South Dakota-chartered trust company Sterling Trustees. Read the rest of this entry »
Using Influencers to Land New Trust Accounts
Posted by Scott Martin in Practice Management on May 30, 2010
Many trust companies have more success marketing their services to the professionals who already have the ear of wealthy clients. Lawyers, investment advisors, accountants, even art appraisers are all worth adding to your network.
Plenty of trust companies are gathering assets by targeting the professional advisors who steer high-net-worth clients toward trusts in the first place.
Accountants, lawyers and other advisors rarely have the power to decide where a client opens a trust account, but they do have an enormous influence on the choice, says analyst Robert Testa, who covers the private wealth management industry for Cerulli Associates.
“Especially for trust companies, we’ve found these reciprocal relationships with other professionals are the most effective way to gain clients,” he told me.
Think of these professionals as the Oprah Winfreys of the wealth management world. Oprah doesn’t actually sell books, but one plug from her helps millions of potential book buyers make up their minds.
The relationship between estate planner and client works a lot like this, Testa says. When a lawyer or financial planner realizes that it’s time to move assets into a trust, the client rarely has a strong opinion on which trust company to go with. Instead, what the planner usually hears is, “What do you suggest?”
Being the answer to that magic question has translated into new business for 68% of the bank trust departments that Testa’s team polled last year, and independent trust service providers would be well served to follow suit.
It’s all about relationships
Estate planners are an obvious fit because they are at ground zero whenever a wealthy family decides to set up a new trust or modify an old one.
However, if you want to get the real inside track on how potential clients’ financial situations are changing, get friendly with their accountants, Testa says.
“You would think people would be more honest with the trust officer or the asset manager, but the CPA knows everything,” he explains. “Once you get a close relationship with the CPA, you can gather the assets.”
Corporate entitities can wield influence too. Millennium Trust got a substantial profile boost this spring when Schwab Advisor Services pointed it out to its 6,000 advisors as a custodian for alternative assets that were no longer welcome on the Schwab platform.
“What we’re able to do is go after the advisor market,” Mary Hackbarth, who heads up Millennium’s marketing, told me. “In terms of business strategy, working with advisors as centers of influence has worked out.”
Even an influential brand goes a long way. When the Dow Jones news service wrote up trust consulting firm Advisors Institutional Services, its marketing team was quick to license reprints that paired the story with the venerable Wall Street Journal logo. While it isn’t an endorsement, the logo still has a positive influence on prospective clients.
Anyone in a position to weigh in on the decision-making process is a potential referral source. Real estate brokers and insurance agents are worth adding to your professional network because they’re often on the scene when people make pivotal life decisions or come into significant wealth.
Robert Testa also recommends cultivating more esoteric professionals on the off chance that they’ll have the right ear at the right time.
“We’ve even heard that the art valuation experts at UBS have referred their clients toward trust companies,” he tells me.
Double-edged sword
Naturally, financial planners and other registered investment advisors are a time-honored center of influence. Jocelyn Schwartz, who ran Fidelity’s estate planning business and is now a financial planner at Pillar Financial Advisors, is often in a position to direct new business to trust companies and the lawyers who write up trust agreements.
She’s also used her influence to move accounts from legacy providers.
“We do spend a lot of time reviewing existing trusts,” she told me. “Disrupting the apple cart is not our first goal, but sometimes we get a client who just isn’t happy no matter what the trustee does, and then that money has to move.”
While Schwartz is happy to work with trust companies that won’t let Pillar manage the underlying assets, other wealth managers are wary of referring their clients to a potential competitor.
“They’re afraid that giving a Wilmington or a Glenmede custody of the assets means the next call their clients get will be from a Wilmington or Glenmede investment advisor,” says Antony Joffe, whose new public trust company Sterling Trustees plans to aggressively market to lawyers and accountants as well as RIAs.
Some trust companies get around this potential conflict of interest by only working with directed trusts and other arrangements that kick the investment responsibilities (and fees) back to the referring advisor. Sterling doesn’t quite do this—Joffe reserves the fiduciary right to fire managers even if they brought in the account in the first place—but plenty of other direct-trust-only providers do.
“We don’t compete with the intermediaries,” Reggie Karas, who runs Millennium Trust’s alternative asset business, told me. “We’re a very plain vanilla service provider by design so we can better build our business in partnership with them,” she added.
In fact, a really successful influencing relationship is always going to be a two-way street, Robert Testa says. Trust companies get the accounts, while influencers get the opportunity to prove their value as a one-stop source for all their clients’ needs—and sometimes even get prospects of their own passed back along the chain.
“Reciprocity is crucial,” he told me. “A trust company with a preferred relationship with an estate planner can suggest that person when trust documents need to be modified,” he added.
“A lot of clients who are missing a piece of their own professional advice network are at a loss. A suggestion goes a long way to getting the best outcome for everyone.”
Scott Martin, contributing editor, The Trust Advisor Blog. Steven Maimes contributed to the research and the editing
Permalink: http://thetrustadvisor.com/news/influencers
South Dakota Sets Record for New Trust Companies
Posted by Scott Martin in News on May 15, 2010
South Dakota is becoming the top choice for trust providers. With ten new launches this year and a roster of 50 institutions shortly, it’s easy to see why banks and advisors alike are flocking to the wealth-friendly state. But despite the welcome mat, screening for new players “isn’t easy.”
This week, the South Dakota Division of Banking announced that Pittsburgh-based Mid Atlantic Capital Group, a $19 billion wealth manager and trust technology provider, applied to receive a charter. Approval is expected before July 1.
Mid Atlantic’s not the only Pennsylvania trust operation to set up shop in South Dakota. Earlier this year, Consohocken, PA-based multi-family office Sterling Trustees decided too that South Dakota’s compelling trust benefits made it better than the other no-tax dynasty trust states.
Sterling’s president Antony Joffe told me, “We picked South Dakota because we wanted the best trust law environment and thought they had what we needed.”
They just received official approval this week and are now ramping up ambitious plans to offer trust services to registered investment advisors, as well as more effectively run the roughly $500 million in high-net-worth trust accounts they already have.
Sterling is one of seven public trust company going through South Dakota’s approval process this year. Denver-based United Western Bancorp’s UW Trust Company, with $2.6 billion in assets, received its approval at the end of March.
Counting Mid Atlantic, three other applications in the pipeline, and private trust companies, and a record 10 companies have entered the South Dakota system so far this year.
One of them, Kingsbridge Trust Company, was launched by Kingsbridge Private Wealth Management of Las Vegas to complete its suite of family office services. CEO David Dunn told the Trust Advisor Blog that the process “isn’t easy,” with hours of meeting with regulators and answering tough questions. “It required a great deal of background work just to file the application,” he says.
“We’re okay with startups”
What’s driving the flood? Five months ago, Les Revzon, president of trust consulting firm Advisors Institutional, who assisted Mid Atlantic with its trust charter application, attended a meeting in Pittsburgh with Mid Atlantic VIP’s to lay out the case for why South Dakota might be the best place to host its new trust company operations.
It didn’t take more than 10 minutes for the honchos at the table to overwhelmingly agree that South Dakota would be their new home. With the benefits adding up—no taxes, dynasty trusts, asset protection trusts, directed trusts, low capital requirements and affordable on-the-ground services—they were sold. All of that sounded a lot better than posting $1 million in regulatory capital in Nevada or Delaware, big staffing costs and waiting over a year for a trust charter.
The interest in the state’s trust environment isn’t too surprising, says Bret Afdahl, counsel for the South Dakota Division of Banking.
“We’re business-friendly, which means that we want our trust companies to succeed,” he told me. “Profit is not a swear word in our state.”
Afdahl likes to discuss the advantages of his state’s trust jurisdiction, and with good reason: According to state statistics, the Division of Banking booked a record $262,651 in trust-oriented revenue last year in the form of examination and supervision fees.
To attract new institutions that measure up, capital requirements are low. A trust company needs to post $200,000 to set up shop in the state. Other centers of the trust industry like Delaware and Nevada require $1 million or more to obtain a trust charter.
New legislation kicks in July 1 to tighten the capital requirements at regulators’ discretion, but this is aimed at established institutions that might run into trouble, Afdahl told me. “We’ll keep it low on the front end to allow for startups,” he says.
Although the new rules also mandate additional background checks for principals and key employees, the South Dakota approval process is streamlined compared to other jurisdictions.
Antony Joffe got the green light in about five weeks, compared to an estimated year to move an application through the Delaware system or up to two years of dealing with the FDIC for a federal trust charter.
Nevada’s quest for modernization
By sheer number of operating trust companies, South Dakota has leapt ahead of Nevada and even Delaware.
Nevada’s lack of appeal for new trust institutions seems odd when you consider that the state went through a great show of modernizing its trust statutes late last year in order to attract new business.
State regulators wouldn’t comment on success or failure. However, a source familiar with local politics says “updating” the rules was less about making the state friendlier to public trust companies and more about setting up barriers to entry.
“You can probably read behind the lines and see that the number of public trust companies in the state hasn’t budged this year,” my source told me. “The new capital requirements make it more difficult for public companies to be formed.”
We were unable to interview officials from Delaware, but according to Bret Afdahl, the issue for that state’s regulators is “quality,” or at least exclusivity. Delaware is legendary for enforcing extremely stringent audit and residence standards that can be too expensive for smaller players to consider.
“Delaware’s rules only really allow for big companies,” he told me. “You need X square feet and Y full-time employees, of whom Z must be trust officers. It doesn’t disallow startups, but you need to be pretty big to cover the initial expenses.”
When it comes to operating on the ground in South Dakota, Sterling Trustees’ Antony Joffe is excited. He plans to set up an office and move all his existing fiduciary activities there.
“We’ll still manage some trusts here in Philadelphia on an individual basis, but we’re going to try to run as much as we can out of South Dakota,” he told me.
Scott Martin, contributing editor, The Trust Advisor Blog. Steven Maimes and senior editor Jerry Cooper contributed.
Permalink: http://thetrustadvisor.com/news/sd-record
Pennsylvania Family Office Provider To Start South Dakota Trust Company
Posted by Scott Martin in News on March 4, 2010
Charter would likely help DM Trust defectors build out a “formidable” platform.
PIERRE, SD, Mar 3 – Sterling Trustees LLC, a Philadelphia-area family office service provider, has filed to receive a trust charter in South Dakota, according to a report released this week by the South Dakota Division of Banking.
A Sterling spokesman confirmed to the Trust Advisor that it has submitted the paperwork to launch a public trust company in the state, but declined to comment further while the application is still pending.
According to the company’s website, Sterling currently provides private trust and family office services to high-end clients; it also offers trust administration services to investment advisors, lawyers and other professionals to add value to their own client relationships.
CEO Stanley Joffe is known in Philadelphia legal circles as a high-powered attorney focused on international estate planning issues. He founded and ran then-Pennsylvania-chartered trust company DM Trust (now operating as Everest Trust with a Delaware charter) as a subsidiary of local law firm Duane Morris in 2007 but went independent a year later to launch Sterling. His son Antony followed him to his new company and serves as president.
“My guess is that they broke up with Duane Morris and formed this new deal themselves,” Jeffrey Lauterbach, founder of Capital Trust, told us. “They look like they’ve got a pretty formidable family office set-up, so this charter might give them added support for that.”
The trust charter would likely help Sterling build out a “formidable” trust platform, he said. In particular, he noted that the company is using Rockit, the elite high-end family office software package developed to handle the Rockefeller family’s needs.
As to why they picked South Dakota, the state has actively courted the business through a combination of an inviting tax regime and trust-friendly statutes. Sterling is the second public trust company this year to start up in the state.
Lauterbach says, “They probably just decided they liked it better than Delaware. Delaware’s gotten kind of tough.”
South Dakota’s getting even easier. The state legislature passed a bill this week that aims to “strengthen the legal and regulatory framework for public trust companies.”
Scott Martin, contributing editor, The Trust Advisor Blog.
Permalink: http://thetrustadvisor.com/news/sterling
-
Most Popular Stories
Powered by Disqus
-
Archives
- February 2012 (8)
- January 2012 (38)
- December 2011 (37)
- November 2011 (5)
- October 2011 (6)
- September 2011 (4)