America’s Most Advisor-Friendly Trust Companies Showcase - Flipbook - Page 21
2026 AMERICA’S MOST ADVISOR-FRIENDLY TRUST COMPANIES
TAPPING YOUR TRUST
PARTNER’S EXPERTISE
IN MARKETING
TRUST-ORIENTED
FINANCIAL PLANNING
TECHNIQUES DOESN’T
DIMINISH YOUR
CENTRAL ROLE IN
YOUR CLIENTS’ EYES.
on beneficiaries’ entitlement to trust
information, and only a few states
allow a trust instrument to delay or
prohibit disclosure of trust information
to future beneficiaries.
INSIST ON ALTERNATIVES
Even as investors are increasingly
eager to expand their universe,
most trust companies still focus on
a relatively limited range of asset
classes. The problem is that private
equity, real estate, or pure commodity
exposure requires a little more due
diligence to work with than vanilla
stocks and bonds.
And even if a traditional trust
company’s platform supports
these assets, it probably doesn’t
provide much in the way of active
educational and marketing support.
The farther outside the vanilla-style
box clients want to go, the higher
the organizational barrier to entry
becomes and the narrower the list of
viable partners gets.
In many cases, even specialized
“alternative” custodians need
to tap third-party specialists in
order to prepare statements that
counterparties can understand and
regulators will accept.
Without a clear incentive to cultivate
that level of expertise internally or via
partnerships, it becomes extremely
expensive for a brokerage firm to
conduct that level of due diligence on
its own, whether it puts these products
on the shelf or not.
And unless affiliates get firm guidelines
on which products are suitable for a
given client, selling alternatives into
client accounts can become extremely
expensive in terms of career costs.
Failing to notice that “enhanced”
credit products were faltering, even
though they still looked good on
paper, forced Securities America
into an 11th-hour sale and doomed
several other brokerage firms just a
few years ago.
Reps jumped from those firms when
they could, bleeding AUM and
professional reputation. Some left the
industry entirely. Others were pushed.
Either way, the example demonstrates
that the more exotic an investment
is, the more difficult it will be for
nonspecialists to work with under
normal circumstances.
That means clearer reporting, better
portfolio-level oversight, and even
enhanced value for the advisor and the
ultimate investor.
After all, the “alternative” slice of
the portfolio is rarely the bulk of the
underlying investment pool, so most
accounts will run into the alternative
space only across 5% to 10% of the
AUM, at most.
If bringing on that extra 5% to 10% of
the assets represents more than 5% to
10% of the sunk costs of handling the
account, at what point is the business
even worthwhile?
Alternative investments are complex.
It’s not like adding new stocks or a few
ETFs to the platform. Firms that come
at the problem with that idea in mind
are likely to get burned.
HOW CAN THEY HELP?
Trust companies know the benefits
of trusts better than anyone. They’ve
seen the results over and over as part
of their everyday operations: lower tax
drag, protection from outside scrutiny
and nuisance lawsuits, and multiple
generations of wealthy families kept
together through a unified ethos and
set of financial instruments.
Even if the alternative assets are
simply held in the equivalent of a
“white envelope” alongside the
conventional investments, the best
practice entails everyone in the chain
of responsibility—from custodian to
advisor to client—knowing what’s in
the envelope at all times.
Having a trust company on your side
that you can trust does more than
simply defend your book of business
when your current generation of
clients dies and hands over the assets,
presumably to a trustee or rival advisor
the heirs pick. Remember, this is a
way you can go on the offensive and
prospect accounts from competitors.
A trust company that can open all of
its “white envelopes” in a format that
an external auditor can digest and
evaluate is going to have an easier time
keeping everything both compliant and
actively transparent.
Either way, if you want to communicate
the value your trust partnership adds
to your clients and prospects, odds are
good that the trust company already
knows exactly what you should say.
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