CEO says the “Professional Advisors Alliance” creates a pathway to provide RIAs, estate planners, CPAs and others everything they need to sell, support and profit from trust relationships. The Nevada-based trust company says advisors can sample support with a “free guide” at www.providentfreereport.com.

Provident Trust Group, the fast-tracked trust provider that was the focus of our rags to riches story last year, intends to redefine the way advisors handle trust business going forward.

“Advisors have been given the short end of the stick when it comes to hand-holding lucrative client relationships.” says Theresa Fette, Provident’s co-founder and CEO.

The near $1 billion Las Vegas-based powerhouse sees advisors and estate planners as the key to growing itself and along with it, the advisors’ business as well.

Its latest strategic marketing campaign is stunning in its outside-the-box audacity.

“The state of the art in the industry right now seems to be reassuring advisors, accountants and lawyers who work with high-net-worth clients that the trust company is not going to actively compete against the advisor,” Fette added.

A full platform for “trust advisor” support

To achieve this goal, Provident is reaching out with a wide range of issue-oriented, product-agnostic educational materials, white-label marketing support and even consulting fees for advisors who help their clients move their money into the company’s trust vehicles.

The fee proposition in itself represents a quantum leap forward for an industry that is still coming to terms with the fee-splitting aspects of directed trust arrangements.

While Provident does embrace directed trusts, in which outside advisors can go on investing their clients’ wealth — and booking the management fees — even after it is granted to a trust, the consulting fee gives advisors a way to go beyond simply protecting their existing business.

In fact, creating an incentive for recommending various forms of trust can make “trust advisor” a separate profit center for advisors who previously relied on retirement planning, investment selection or some other specialty to pay the rent.

“This provides them with a way to justify the time and expertise they put into helping their best clients set up trusts and capture recurring revenue as well,” Fette explains.

Naturally, Provident reaps its own rewards in the form of administration and custody fees, as well as the sheer economies of scale that increased market share is already creating.

Back in September, the company only had $750 million in custody across maybe 10,000 accounts.

Now, Fette tells us Provident has captured another 2,000 accounts and another $75 million, which translates into annualized growth of about 20%.

Compare that to what Bernard Garbo at Trust Updates has determined is an 8% average growth rate for trust companies in this size bracket, and the success story becomes crystal clear.

Business development through private label reports

Along with Jason Helquist, the company’s co-founder and chief compliance officer, Fette is devoted to the idea that the more an advisor knows — especially about a complex field like trusts — the better equipped he or she will be to turn it into a profitable business.

“We believe very strongly that business development is rooted in education,” Fette says.

“Based on a webinar we did recently, one referring advisor was able to take a product idea using 401(k)s and alternative investments and turn it in $25 million in AUM,” she adds.

Provident’s educational support also plays into this theme as well.

The first reports include “The Extended Bush Tax Cuts in Plain English,” which lays out the impact of the 2011 tax overhaul on investors and small business owners. (Click HERE to receive it.)

Provident retained San Francisco based, Financial Marketing Associates to help develop its marketing strategy, produce reports and launch an email marketing campaign to trust firms, estate planners, financial advisors, life insurance agents and FINRA broker-dealers.

The first report and others on asset protection trusts and directed trusts can be branded to include the advisor’s name on the cover and content they may contribute.

Future publications in the series will focus on tax planning and other topics.

The goal here is not to sell Provident’s products, but to expand the pool of professional advisors out there who can recognize when it might be appropriate to suggest that a client investigate a trust.

As the provider of all this information, Provident is likely to be the first company that advisors call when and if they do need help setting up a trust for a client.

That’s fine with Fette, but it’s not the immediate goal, she says.

“These are product-neutral. Of course we can help with the implementation, but they’re really about improving the level of practice out there to everyone’s benefit,” she explains.

“Some practitioners use old and cold law and that’s ultimately unfortunate for their client.”

More progress down the road

Provident has lined up brochures and other client-oriented marketing materials along with a trust savvy sales team to support the advisor. The strategy parallels the role of a traditional mutual fund or direct participation program wholesaler, but in the trust space.

Like a wholesaler, Provident aims to teach its affiliates — members of what Fette calls the Professional Advisor Alliance Program — how to sell trusts to clients who could benefit from them.

The clients win because they get the benefit of the finest estate and tax planning expertise out there, along with the most sophisticated vehicles and strategies.

The advisors win. And Provident gets a shot at becoming a much bigger player in the trust industry.

It’s ambitious, but that’s the way Fette and Helquist think.

“I consider Nevada the most progressive state in the country as far as trust law is concerned,” Fette says.

“We have some of the best attorneys in the country and one of the most progressive environments for setting up trusts,” she adds.

“I want Provident to be the most progressive trust company in the most progressive state in the country.”

Scott Martin, contributing editor, The Trust Advisor Blog. Jerry Cooper and Steve Maimes contributed to the reporting and research.

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