Custody Rule Change A Boon For National Advisors Trust Hot

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Last year, the SEC strongly discouraged advisors from acting as trustees on client accounts, even in circumstances where they could trade off the responsibility from employee to employee or even between affiliated companies.


Advisor-trustees now face annual surprise audits and substantial added compliance costs.


As a result, the once-common practice of advisors volunteering to administer a client's trust on a pro bono basis has stopped. Even if everything's above board, the compliance costs make it a lot less reasonable to take on this business for free.


Since the main business rationale here was to ensure that the trust assets remained under the advisor's control -- and not moving to a competitor -- the strategy was more defensive than anything else. That's where companies like National Advisors Trust come in.


National Advisors Trust is advisor-owned, so it won't compete with the stakeholders that feed it business and ultimately profit from its success. The advisors keep their AUM -- and the associated fees -- and their clients get the security of knowing that their assets have been removed from their taxable estate.


Great profile of the institution and its business model at RIABiz. 


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