When most rias think of their custodial options, their choices seem limited to the big four: Schwab Institutional, Fidelity Institutional Wealth Services, TD Ameritrade, and Pershing Advisor Solutions. While there are other, smaller players, a quiet but consistently growing player in the advisor custody space, and a unique one, is Trust Company of America.
The uniqueness is highlighted when Terry Reitan, president and CEO of TCA, begins an interview by talking not about how great the firm’s customer service is, how it helps advisors with their marketing efforts, or how long its mutual fund supermarket list is, but about software. “Our concept is that most advisors use models” for their investment management, and “our software is model-centric,” says Reitan. When RIAs that custody with TCA want to rebalance their clients’ portfolios in mutual funds, ETFs, or individual equities, they don’t download the data, reconcile it, and re-upload it, rather they have an interactive, direct session with TCA’s mainframe. Since, Reitan says, TCA’s portfolio management, trading, and rebalancing Web-based software, called TCAdvisor, was written by “ourselves, we can modify it” to meet those RIAs’ needs. There are about 90 advisors who custody $8.3 billion at Trust Company of America (as of June 30, 2008), and those assets grew at a 26% clip over the trailing 12 months, according to Reitan. The company also provides back-office services and reporting. The cost for TCA’s custodial services is “20 to 30 bps all in” says Reitan. Since tax planning is such a big issue for clients and potential clients, TCA has added tax optimized trading, providing a “decision-making tool” giving advisors the discretion to trade or not based on the tax consequences for their clients.