Best and Worst Trust Accounting Software

Once reserved for an ultra-specialized market, trust technology has caught on with family offices, private bankers and a widening range of advisory firms looking to arrange their systems around a true open-architecture hub.

Trust accounting systems have always suffered from a niche reputation.
While the software was world-class, relatively few people in the industry found out unless they were already full-time trust administrators working with it every day.
But over the last few years a wider range of firms have gotten a taste of what these platforms can do.

They’re figuring out how to bring the added functionality up out of the niche and into their own core operations.

This might be the year trust accounting hits the mainstream.

As always, to help Trust Advisor readers make sense of the major players and what they offer, we’ve put together a free guide that you can download.

Trust officers needed to be able to make disbursements to beneficiaries, so the system needed a cash management function to track the payments.

They needed a way to track beneficiary preferences, special requests and where to send the checks, so many of the platforms already incorporated what we now know as modern CRM tools.

And they needed to support both in-house portfolio management as well as the prospect of a trust grantor naming an outside manager to run the assets forced these programs down an open investment architecture path well before the concept became an industry buzzword.

Add in the tasks that were always mandatory for trusts but are only now emerging as elite practice for other types of accounts, and you’ve got yourself the makings of what amounts to a turnkey wealth management system.

“We are seeing the continued transition from stand-alone trust accounting platform to complete wealth management platform,” says Robert J. Ellis, principal of wealth management consulting firm Fast Track Advisors, LLC.

"Given that trusts have certain accounting idiosyncrasies such as separating principal and income, there is still no reason why financial advisors should have to utilize separate platforms in order to appropriately manage their clients' wealth holistically.”

Family offices were quick to connect the dots and incorporate trust accounting into their in-house systems or even use it as the cornerstone of their operations.

Now private banks and RIAs are coming around as well, Ellis says.

Opening the architecture to UMAs and the Cloud

INFOVISA, for example, signed three of the ten biggest customers in its lifetime in just the last year and has hired three new developers to give all the accounts what they want, says Mike Dinges, the company’s president.

“We have a lot of client success stories,” he explains. “Our focus has always been developing new strategic partnerships to enable them to succeed.”

For many, the ability to host the software remotely – on the server “cloud” – has been a real motivational tipping point.

Previous generations had to buy servers to run the latest trust software, which made maintenance and updates an ordeal for non-tech-savvy start-up firms.

Now the basic adoption process practically boils down to opening a Web connection and letting the data flow, freeing up resources that would once have been chewed up in installation to focus on training your staff and integrating the new technology into your existing systems.

Mike Dinges has seen what he modestly calls “continued growth” on the cloud delivery front, with top-tier users looking to streamline their existing software environments while smaller ones simply want to run lean, cheap and scalable from day one.

Naturally, some firms are upgrading their software as part of a larger migration to unified managed accounts or some other investment approach their current system simply can’t support.

But while the race for internal efficiencies is usually a factor, Bob Ellis points out that high-net-worth clients themselves are increasingly demanding an advisor who can provide the enhanced holistic service that once only trusts could provide.

“These clients will insist that their wealth be managed in a manner that requires the advisor to completely and professionally serve the whole client,” he says.

“Any wealth manager who utilizes the holistic approach will require the best thinking in comprehensive trust-enabled wealth management platforms.”

Convergence on the horizon

These companies have had to stay nimble over the years, so at this point innovation is baked into their culture.

The need to support straight-through processing sparked the last wave of industrywide migration years ago, forcing vendors to keep their technology fresh in order to entice business from competitors.

And with banking M&A shrinking the pool of prospects, the industry maybe had a maximum 2,000 customers for all vendors to fight over before non-traditional firms started crossing over.

As it is, trust functionality is already showing up in more general wealth management technology.

Ellis points to platforms like SEI’s Wealth Platform and Citi’s OpenWealth, which already contains best-of-breed features from specialized vendor Fi-Tek’s TrustPortal, as examples of “technology of the future.”

Both are UMA-ready and open to sophisticated tax-sensitive management and trading.

And in Citi’s case in particular, the “holistic” side of the proposition is truly scalable all the way to the top of the industry.

OpenWealth incorporates a true laundry list of capabilities: end-to-end portfolio management, rebalancing, trading, reporting, trust administration and global custody capabilities.

In other words, it’s essentially a wealth management platform with something extra on the trust side and endless room to grow.

Or as Joseph Di Talia, who runs the program for Citi Investor Services, sums it up, “the full suite of investment services solutions delivered through Citi OpenInvestor lets wealth managers focus on building relationships and growing their business.”

The proposition doesn’t get much simpler than that.

Download your free copy of our Trust Technology Buyers Guide HERE.

Scott Martin, senior editor, The Trust Advisor



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