Wealthspire Advisors, a New York-based registered investment advisory firm owned by global insurance brokerage NFP, has launched Wealthspire Trust, a trust company incorporated in Tennessee. Wealthspire advisors, who manage almost $25.9 billion in assets, will now have access to the firm's personal trust services. He will be based in Franklin, Tenn.
While Wealthspire has grown significantly over the past several years, the firm found it was serving more high net worth/ultra high net worth clients, said Heather Flanagan, who was hired in 2022 to head the family office division. of Wealthspire. She also serves as chair of the board of Wealthspire Trust.
“Over the years, they thought, 'now that we're growing, it's time to focus on serving these high net worth/ultra high net worth clients in a differentiated way.' So they decided to develop a family office services department and part of that vision was to create a de novo trust company,” she said.
Wealthspire Trust has appointed Jonathan Connolly, a managing director and head of the trust at Wealthspire, as president. Prior to joining Wealthspire in 2022, Connolly served as senior vice president and managing director of Comerica Bank & Trust, overseeing fiduciary sales, trust administration and middle office teams across North America. During that time, he helped the firm grow revenue by over 30%.
“As we continued to evolve our services, we sought a favorable jurisdiction for our trust company, and that is Tennessee,” Flanagan said in a statement. “In support of our advisory teams and clients, we have cultivated a team of wealth strategy professionals who specialize in estate planning, wealth transfer and taxation. The combination of this expertise, along with Wealthspire Trust's talented team, innovative technology and Tennessee charter, uniquely positions us in a competitive industry.”
Flanagan said she did a lot of research on the different jurisdictions out there and decided on Tennessee for several reasons. First, Wealthspire's parent company, NFP, has a strong presence in the state. Tennessee has also been strong in passing beneficial trust laws over the past 10 years.
“We were looking for a situation that would be similar to what our company is — young, innovative, forward-thinking, responsible,” she said.
For example, she pointed to a recent change in Tennessee's trust laws, effective July 1, that allows family-owned partnerships to qualify for a valuation allowance.
“Tennessee had all the benefits that Delaware has in their trust laws,” she said. “They keep looking at the laws of faith; they continue to innovate in that space and draft really great legislation.”
Tennessee's trust regulations allow for perpetual trusts, directed trusts, asset protection trusts, and community property trusts. State laws also allow the company to enforce provisions or modifications of a trust through non-judicial settlement agreements.
Establishing a trust company within the RIA means that client assets most suitable for a trust remain with the firm and its advisors rather than being transferred to an outside institution.
“The way I saw it at first was, we'd have this trust company, and the trust officers would essentially be additional, valuable members of the advisory team, really get to know the clients, really understand everything that happening with clients and being able to be very responsive and proactive with advisors and really put our best effort into serving clients,” Flanagan said.
Other large RIAs and broker/dealers have also established their own trust companies in recent years. Creative Planning has its own trust company, like Mercer Advisors, through it the acquisition of Kanaly Trust in 2016. Hightower launched Hightower National Trust Company in 2022 with a national charter and the US wealth management business of CI Financial, now known as Corient, opened her own trust company last year.
Kestra Financial now has a trust company subsidiary, Arden Trust Company, through the acquisition of Reliance Trust Company of Delaware in December 2018.
Trust companies generally oversee trusts for clients, providing legal and administrative services, portfolio management, and sometimes physical storage services for assets such as jewelry or collectibles.