In an effort to help financial advisers hold onto clients' assets in the transfer of wealth from one generation to another, TD Ameritrade Institutional has created a new corporate trust unit.
The Jersey City, N.J.-based custodian created the Advisors Private Wealth Trust with National Advisors Trust Company for the exclusive use of the 4,500 registered investment advisers who custody assets with TD Ameritrade, the firm said. National Advisors Trust, which is owned by RIAs, has $10 billion under administration and has no competing investment management business.
“You can look at APWT as an extension of our services teams,” said Matt Judge, director of wealth management. “Our product team is the first line of defense.”
He pointed to the greater trend of wealth transfer — the expectation that $30 trillion in assets will move from one generation to the next by 2030 — as a motivational factor behind the alliance with National Advisors Trust.
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“We want to help [advisers] attract new assets, retain current assets and get in front of another generation of clients,” Mr. Judge added.
Many clients name a child or other relative who an adviser doesn't have a relationship with as a successor trustee, and as a result most advisers lose those accounts within a year of that client's death, surveys show.
If the adviser can recommend a corporate trust solution to serve as the successor trustee, both the adviser and the client can be confident that the finances of the heirs will continue to be overseen by the client's adviser.
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Advisers who work with TD Ameritrade for custody services will still be able to use other third-party trustee providers. Mr. Judge notes the partnership with NATC is really a matter of providing service that's geared specifically to the RIA model.
“NATC is owned by advisers, and who knows their needs better than other RIAs?” he said.
