Secret sauce for asset retention: An internal trust officer
Lee Travers has an ace up his sleeve when it comes to attracting new clients and hanging onto the descendants of his existing clients.
That ace is his trust officer Carol Rushton.
In an unusual move for a firm with just $200 million in assets under management, Income Solutions Wealth Management boasts the kind of in-house expertise generally only offered at the largest RIAs or wealth management divisions of banks.
Travers hired Rushton away from Regions Banks where she had been working while Regions owned Travers' former firm, Morgan Keegan.
He founded his independent firm in Tyler, Texas, after Raymond James bought Morgan Keegan from Regions in 2012. Income Solutions is affiliated with the independent broker-dealer LPL Financial.
‘WE CAN'T DO THAT WITHOUT HER’
After Travers convinced Rushton to join him at his independent firm, she brought with her about $40 million in assets, he estimates.
One example of the value Rushton brings will be evident in an upcoming meeting being prepared by Travers and his colleague Holly Lovell. It will be with a high-net-worth family headed up by two matriarchs. Rushton will be quarterbacking the meeting with the sisters, their accountants and lawyers, as well as experts in oil and gas and timber, where the family holds investments, Travers says.
The meeting would not be happening at all without the trust officer's expertise, Travers says.
"We can't do that without her," he says.
Another key advantage, Lovell adds, is that Rushton's contracts with her clients contain multigenerational commitments that empower her to continue working with their descendants.
"That kind of solidifies our relationship into the succession plan" as money passes from one generation of clients to the next, says Lovell, a 36-year-old junior planner in the firm whom Travers, 63, says will take over after he retires.
‘A SELF-FUNDED POSITION’
Mark Hurley, the chairman and CEO of Fiduciary Network, which invests in large RIAS, some of which are big enough to have trust departments, says he has never heard of smaller firms pulling that expertise in-house. But in the right situation, it could prove to be a smart idea, he says.
Most smaller firms "could probably rent that capability cheaper than having it themselves," Hurley says.
In bringing assets to the firm, Rushton paid her own way, he added.
"It's a self-funded position," Hurley says.
Apparently, it is a rare one at that. When Travers told his IBD about the trust officer on his staff, LPL told him that they "never heard of that before," he recalls.
But, LPL's own trust company chartered in all 50 states, The Private Trust Company, provides Rushton with all the support she needs to function as a trust officer seamlessly within Travers' company, he says.
NO MORE PRODUCT-PUSHING
Now that Rushton works for an independent firm, she no longer is compelled to push other banking products onto her trust clients, some of whom she has worked with for as long as 30 years, Travers says.
"Banks have a tendency to micromanage," he says. "They try to cross-sell every single product they have and bank customers just don't like this. If you have a trust, you have probably enough money that you don't need a home-equity line of credit or a reverse mortgage."
For some time now, Travers says, his office of supervisory jurisdiction, Financial Resources Group in Charlotte, N.C., has been urging him to travel the country to teach other advisers how to use trust services to build their practices, as he has done. The problem is, he says, that he is so busy now that he has no time to do it.
He estimates that about 10% of his firm's roughly 100 clients currently make use of Rushton's services.
"My hope," he says, for the future "is that it would be 100%.