If you want to discuss growth in the RIA channel, Frank Maiorano is a perfect fit. He certainly knows of what he speaks; after years with Schwab Institutional he moved to Nuveen to build out their RIA distribution business. Now, as the new CEO of Trust Company of America, Maiorano is tasked with overseeing the custodian’s phenomenal growth. He was able to squeeze us in between traveling, planning for their annual conference and, believe it or not, getting married.
Q: Unlike many of your competitors, Trust Company of America does not have a retail business. Does that help or hurt you from a competitive standpoint?
A: It helps. We do not have a retail business; we are completely immersed in the institutional space. We do not manage any money; we are exclusively focused on registered investment advisors. That’s one of the things that differentiate us when we’re out on the road. I was just speaking with an advisor at a large bank brokerage firm. The bank’s retail side was calling on his clients, which as you might imagine he was very uncomfortable with. He liked the idea that we have no conflicts of interest in that regard. We don’t compete with our clients, who are our advisors.
Q: What are you hearing from the RIAs you deal with? Is there a sense we’re through the worst of the financial crisis?
A: It’s interesting; there’s a lot more direct ownership involvement taking place. After the downturn of 2008, the revenue falloff didn’t really happen until 2009. They could enjoy the fruits of their labor in 2006 and 2007 and didn’t have to do as much. But now firm owners have to take more of a direct role in client acquisition and revenue growth and running the day-to-day business.
Q: You tout your technology as something that differentiates you from your competition. How so?
A: The difference is that our technology is fully integrated, not a number of different solutions bolted together. So trading, rebalancing, performance reporting, all of those functions are done on one platform. The advisor is able to rebalance 18,000 client accounts with just a few key strokes.
Q: But isn’t that a problem if large RIA firms have legacy technology they’re comfortable with?
A: Transferring to us is similar to transferring to any other custodian. But the neat thing is that we send in a SWAT team to help with the transition (we actually call it a conversion team). Our largest conversion was for $1 billion of business, and we did that over a weekend. He’s still with us and very happy. The point is to begin the transfer on a Friday night and be done with it on a Monday morning, so there is no interruption to the client whatsoever.
Q: What are your growth aspirations for the near future?
We probably won’t ever be a Schwab or TD Ameritrade, but we’ve grown 147% over the last five years and show no sign of slowing.