Everyone in the industry is chasing all the AUM they can find, but the “secret recipe” for converting those paper assets into actual fee-bearing accounts has been elusive for giants and independents alike. On the other hand, Las Vegas-based Provident Trust has prospects calling them out of the blue to sign up.
When we checked in with Provident CEO Theresa Fette back in February, she’d taken her start-up from zero to $1 billion in assets and was aggressively courting advisors to partner up with and grow alongside.
It evidently worked, because 10 months later, Provident is signing the paperwork to triple its clientele and assets under administration, leaving it with 30,000 accounts and a hefty $3 billion on its platform.
“They’ve been coming to us,” Fette says. “We haven’t had to chase them.”
Another account — this one to serve as administrator for a new pooled investment product — adds $100 million in icing to the cake, and Fette tells me the pipeline is full of looming deals that she can’t talk about yet.
She attributes the extremely positive word of mouth to the firm’s independent reputation. Unlike captive trust departments eager to refer business to affiliated wealth managers, Provident exists solely to provide administration and custody.
The fact that the firm is so accommodating to alternative assets doesn’t hurt either.
Provident earned its stripes in the alternative asset world as a custodian for self-directed IRAs, which often hold wealth that’s a little more exotic than the conventional stocks, bonds and cash that every vendor can support.
Real estate, gold and even life insurance settlements: as a recent report from industry research firm Cogent indicates, even in the button-down wirehouses, 40% of advisors now build portfolios that incorporate at least one “alternative” asset class.
“Many major players are looking for a place to custody their alternatives,” Fette notes. “That’s what Provident specializes in, and that’s another reason people are coming to us.”
With all that growth on the table, Fette has had to staff up fast with trust officers and other support personnel just to keep up. She says she’s doubled her Nevada operation and is keeping her New England satellite office full as well.
Scott Martin, senior editor, The Trust Advisor Blog.