“Advisors want to use trusts to retain client assets and bring in new AUM, but don’t like dealing with all the time and paperwork involved in onboarding clients and handling complex distribution requests. That’s why Wealth Advisors Trust is committed to being an innovative problem solver. We remove the pain of trust administration for advisors, enabling them to focus their time on winning new business and growing clients’ wealth,” says Holtby.
Easing pain points
When evaluating corporate trustees, most advisors aren’t looking for those with the most assets under management or those who have been in business for generations. They want to work with a firm that can ease the time-consuming administrative burdens that keep them going after new clients and bringing in AUM.
They want a firm that can fully understands their trust-related pain points. Onboarding. Distributions. Mediating conflicts among beneficiaries. Managing fiduciary risk.
Wealth Advisors Trust is committed to easing all of these pain points by solving advisors’ most intractable trust-related problems and providing innovative services and competitive advantages that can help them grow their trust business without significantly increasing their administrative burden.
The South Dakota advantage
Advisors want to work with corporate trustees in states whose trust laws are designed to deliver the most attractive tax and legal benefits for trustees and beneficiaries.
That's why Wealth Advisors Trust South Dakota chose to establish its headquarters in South Dakota. The Mt. Rushmore state has no income taxes, relaxed restrictions around modifying trust documents, and the most protective trust privacy laws in the nation.
Innovative from the start
Wealth Advisors Trust only administers directed or delegated trusts where an investment advisor or wealth manager controls or oversees investment decisions, respectively.
“Advisors want to manage the money in a trust, since it helps them retain client assets and deepen relationships with beneficiaries. But they really dislike the nuts-and-bolts aspects of trust administration, like onboarding and handling distribution requests. So, early on, we decided to focus our lens on modernizing these ages-old labor-intensive processes,” says Holtby.
“We quickly realized that trust administration is really a supply-chain-management challenge. A request or issue comes in, a solution goes out. And the best way to make these processes as easy and efficient as possible is to leverage digital technologies to automate traditional manual workflows.”
For example, the firm knew that it could take forty minutes or more for a trust officer to process a single printed trust distribution request form. So, in 2010 Wealth Advisors Trust developed the industry’s first fully online distribution request form application and its associated workflows. (Want a look? They'll show you.) This innovation dramatically reduced processing time, improved accuracy and cured archiving headaches by allowing these forms to be stored and accessed electronically.
In 2020, the firm took on one of the most onerous and time-consuming tasks for advisors, beneficiaries and trust administrators: Onboarding. After analyzing onboarding workflows and bottlenecks from the viewpoint of each constituency, Wealth Advisors Trust redesigned and optimized the entire process leveraging digital workflows. (Again, want a look?)
“Now, the advisor can upload all onboarding-related documents that don’t require passwords. Our team reviews them and within four days creates a single checklist of everything that needs to be approved and by whom. This streamlined process does away with the endless back-and-both between advisors, beneficiaries and us, enabling onboarding to be completed much faster and with much less frustration,” says Jearon Cambron, a Project Manager at the company.
But “going digital” is only the tip of the disruptive wave Wealth Advisors Trust uses to challenge the status quo and the way corporate trustees work with advisors.
For example, in 2017, Wealth Advisors Trust revamped its pricing model using a proprietary time- and risk-based algorithm that does away with traditional AUM-based fees. The algorithm updates come from data based on the trust administration workflows centered on a native cloud-based solution.
The benefit of this approach is that they can collaborate with advisors to come up with innovative solutions that reduce the time Wealth Advisors Trust needs to spend on fiduciary oversight and everyday administration. Less time and risk exposure translates into lower trustee fees.
Here’s an example. An independent adviser asked Wealth Advisors Trust to serve as sole corporate trustee for a complex $15 million trust with five beneficiaries who were constantly squabbling over its investment holdings and distribution policies. (Got a similar problem? They can help.)
The trust held both marketable securities and hedge fund assets. Given that the beneficiaries collectively requested 25 distributions per year, the level of fiduciary and compliance oversight needed to manage a single trust of this size and complexity would be extremely high—as would its associated trustee fees.
First, re-register the trust in South Dakota, where it’s relatively easy to modify trusts. Next, make it a directed trust, so the adviser could have full discretionary authority over investment decisions. Next, separate the one trust into five separate trusts so the adviser could manage investments and distributions the way each beneficiary wanted.
This solution was embraced by both the advisor and the beneficiaries. Once implemented, it dramatically reduced the workload and fiduciary risk for Wealth Advisors Trust, enabling them to cut their fees by 20%-30% per year. In the first year alone these savings paid all outside legal costs needed to modify the original trust--an impressive return on investment for a trust that will be around for 20 years or more.
Here’s another example. Several years ago, an advisor brought over a $9 million legacy trust from another corporate trustee. The trust had a single beneficiary who typically requested 15 ad hoc discretionary distributions a year.
For each request, the advisor had to gather and submit the appropriate supporting documents. Then the trust committee had to meet to review and approve each request.
After a certain amount of time had passed, the trust officer analyzed the distribution provisions of the trust and realized that it would allow for the scheduling of automated distributions throughout the year up to a certain percentage.
After the trust officer and the advisor confirmed that this approach aligned with the beneficiary’s financial plan, it was quickly implemented, to the benefit of all. The advisor no longer has to spend hours of time filling out distribution-related forms. The Wealth Advisors Trust team no longer has to process and review individual distribution requests. And the beneficiary can make better financial decisions because he knows exactly when he will receive distributions throughout the year.
All in a day’s work
“We get the most satisfaction when what we do helps an advisor win new trust clients or makes their lives easier in general” says Holtby.
"The advisor gets more “sticky” assets to manage and the opportunity to deepen client relationships. Beneficiaries get their distributions faster and with less frustration. And we benefit by being able to do what we do with greater speed and efficiency. It’s a win-win for everybody.”
Wealth Advisors Trust Company’s innovative approach has earned the firm its inclusion in the 2021 America's Most Advisor-Friendly Trust Companies published by The Wealth Advisor. This complimentary 50-page complimentary Guide features 22 of the top advisor-friendly trust companies in America, who collectively manage over $438 billion in assets. To learn more about Wealth Advisors Trust Company's capabilities, please CLICK HERE,