Wealthspire Advisors, a New York City-based registered investment advisory firm owned by global insurance brokerage NFP, has launched Wealthspire Trust, a Tennessee-chartered trust company. Wealthspire’s advisors, which manage nearly $25.9 billion in assets, will now have access to the firm’s personal trust services. It will be based in Franklin, Tenn.
As Wealthspire has grown significantly over the last 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 lead Wealthspire’s family office division. She also serves as chair of the Wealthspire Trust board.
“Over the years, they thought, ‘now that we’re growing, it’s time that we focus in on serving those high-net-worth/ultra-high-net-worth clients in a significantly differentiated way.’ So they decided to develop a family office services department, and part of that vision was to establish a de novo trust company,” she said.
Wealthspire Trust has appointed Jonathan Connolly, a managing director and head of 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 searched for a favorable jurisdiction for our trust company, and that’s 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, together 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. For one, Wealthspire’s parent company, NFP, has a strong presence in the state. Tennessee has also been strong in enacting beneficial trust laws over the past 10 years.
“We were looking for a situs that would be similar to what our company is—new, innovative, forward-thinking, responsive,” she said.
For example, she pointed to a recent change in Tennessee trust laws, effective July 1, that allows family-owned partnerships to qualify for valuation discounts.
“Tennessee had all the benefits that Delaware has in their trust laws,” she said. “They continue to look at the trust laws; they continue to innovate in that space and to really draft great legislation.”
Tennessee’s trust regulations allow for perpetual trusts, directed trusts, asset protection trusts and community property trusts. The state’s laws also allow the company to implement uni-trust provisions or modifications through non-judicial settlement agreements.
Creating a trust company inside the RIA means client assets best suited for a trust remain with the firm and its advisors instead of being transferred to an outside institution.
“The way that I saw this at the beginning was, we’d have this trust company, and the trust officers would essentially be additional, valuable members of the advisory team, really know the clients, really understand everything that is going on with the clients, and be able to be very responsive and proactive with the advisors and really bringing our best efforts to serving clients,” Flanagan said.
Other large RIAs and broker/dealers have also launched their own trust companies in recent years. Creative Planning has its own trust company, as does Mercer Advisors, via its acquisition of Kanaly Trust in 2016. Hightower launched Hightower National Trust Company in 2022 with a national charter, and CI Financial’s U.S. wealth management business, now known as Corient, launched its own trust company last year.
Kestra Financial now has a trust company subsidiary, Arden Trust Company, through its 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 safekeeping services for assets like jewelry or collectibles.
