For most of its eleven-year history, National Advisors Trust has required RIAs to custody trust accounts on its proprietary platform, AdvisorDesk. In a recent expansion, National Advisors Trust's trust administration services are available to RIA firms on the Fidelity and the TD Ameritrade platforms; those services will be available on the Schwab platform beginning in the fourth quarter of 2012.
Overland Park, Kansas-based National Advisors Trust, which calls itself the largest independent, RIA-owned trust company in the nation, has more than $7.5 billion in assets under administration. Its growth can be explained with a hypothetical example.
Say that RIA Jim Smith has a long relationship with the Jones family. Mary Jones, the family matriarch, dies and leaves millions of dollars to a trust-the millions of dollars of securities that Jim has managed and would like to retain.
"A new account must be established for the trust," Ron Ferguson, CEO of National Advisors Trust, told Financial Planning. "The trust must be administered and trust accounting rules must be recognized." In this example, Jim could retain management of the assets, if Mary has provided for that in the trust, and the assets could be custodied at National Advisors Trust, which provides trust services and does not compete for asset management fees.
However, suppose Jim typically custodies assets at Schwab or Fidelity or TD, or some combination of those firms. "We now have the technology to allow RIAs to keep trust assets at the major custodians, if that's what advisors prefer," Ferguson said. "That may allow RIAs to streamline their back office operations."
RIAs may use multiple custodian platforms in the management of clients' portfolios. "Providing 'custody platform of choice' trust administration services on Schwab, Fidelity, TD Ameritrade or National Advisors Trust makes it easy for our advisor firms to manage their trust accounts on any of those platforms," Ferguson said.
Many RIAs have wanted to be able to choose the most convenient trust custody platform, according to Ferguson, so his company has announced this service expansion. "This is a bit more work for the trust company," he said, "but it provides a clear advantage and flexibility to the RIA firm."
In addition to providing an operational advantage, those RIAs leveraging National Advisors Trust's private label trust program will be able to extend their brand to the trust accounts held on other custody platforms, the company asserts. "Private label branding for trust accounts across multiple custody platforms was another key to making this strategy work well for our affiliated RIAs," added Ferguson.