Terry Reitan, president and chief executive of Trust Company of America since 2005, has retired.
Under his leadership, Trust Company of America quadrupled its assets under custody – growing from $2.3 billion to more than $9 billion.
Frank Maiorano, who most recently was managing director of the RIA and institutional consulting services group at Nuveen Investments, succeeded Reitan on Jan. 17.
Prior to working at Nuveen, Mr. Maiorano, 50, was with Charles Schwab & Co., from 1989 to 2001. During his 12-year career there, he held a variety of positions including divisional vice president at Schwab Institutional. He joined Nuveen in 2001 and left there in 2008. He took a year off from his career before joining Trust in mid-January.
Reitan, 63, came to Trust with more than 18 years of experience in the financial services industry. He had previously served as president and CEO of Fiserv Investment Support Services division.
Denver-based Fiserv ISS, the former DATALynx, custodied client assets for some 400 fee-based financial advisors through its Advisor Services unit. In 2007, TD Ameritrade acquired the unit.
Reitan also served as president and held a number of executive positions during a stint at First Trust Corp., one of the nation’s largest independent trustees of self-directed individual and business retirement plans. Reitan is a certified public accountant.
When Reitan joined Trust, he said he believed that he could leverage its technology for growth.
“I joined Trust because I’m convinced that the company has a superior technology offering, which translates into a tremendous opportunity for growth,” said Reitan in 2005. “Our team is eager to share with independent advisors the benefits of our custodial services and our technology, which have been a well-kept secret within the industry.”
Reitan seems to have succeeded in his goals. Trust’s assets grew at a compounded annual growth rate of about 35% during his tenure in rising from $2.3 billion to more than $9 billion.
Right technology, right time
He believes the growth can be attributed to Trust having the right technology at the right time for financial advisors.
“The recent slump in the market put a bright spotlight on the importance of efficiency and scalability for financial advisors,” he said in an earlier statement for RIABiz. “Inefficiencies can be hidden when times are good, but when markets are down, the efficiency our technology provides becomes invaluable.”
Trust has the technology to allow an advisor to trade a virtually unlimited number of accounts simultaneously and to keep trading costs minimal because of the pricing of its omnibus trading platform.
This technology was precisely what Gordy Wegwart, president of Verity Investments in Durham, N.C., was looking for. Verity manages $250 million and it keeps $150 million with Trust.
“We searched and searched and searched for nine months,” he said in an earlier interview.
Verity invests the retirement savings of teachers and professors in 403(b) plans. This means needing to add $100 to $250 at a time – and needing to allocate to 15 or 25 positions. Trust’s technology allows that to happen with a push of a button and with minimal trading costs, he says.
Many times its size
Trust’s technology allows it to compete with custodians many times its size, says Sara Nelson, vice president of marketing. The key is the size of the advisors it is able to attract.
“[Our clients] are not a small series of smaller advisors servicing a small group of clients,” she says. “They are more often than not very large advisors who support an array of representatives who market their investment strategies to end-clients they will never meet.”
Approximately $6 billion of the assets in custody at Trust fall into this TAMP category, whereby the assets are managed by an RIA on Trust’s platform, and the client relationship is managed by a third-party firm, according to the company.
The third-party firms include independent broker-dealers, CPA firms and other RIA firms that focus on gathering assets.
RIAs using the Trust platform are managing more than $500 million each for representatives at LPL Financial of Boston and San Diego, and Lincoln Financial of Philadelphia.