Achieving national chartered trust company status makes the firm even more attractive to HNW and ultra-HNW clients, its CEO says.

Hightower’s greenlight by regulators to transform its Texas-based trust company into a nationally chartered entity will enable the Chicago-based firm to deepen its high net worth/ultra-HNW business offerings, catering to the complex needs that are increasingly in demand.

That’s the view of Bob Oros, Hightower chairman and chief executive, as he told Family Wealth Report recently about winning the regulatory status from the US Office of the Comptroller of the Currency. The regulator allowed the transformation of the trust business to go ahead. The new entity - Hightower Trust Company, National Association - will be based in Houston with an office in Chicago.

HNW and UHNW individuals want advice with increasingly complex issues, and that requires trust company expertise, so the firm decided that it made most sense to build an in-house offering, Oros said in a call. 

“As we looked at the spectrum of services we asked how can we help advisors deal with more complex advice? There is real value in such advice,” he said. “We do expect this to be something that helps our business grow even faster. This is an important tool for new client relationships.”

The new trust business offering doesn’t mean that Hightower’s advisors will be pressured against using the firm's non-trust services. The new offering is about giving advisors access to new tools and structures for clients, he said.

“We have plans to expand and launch new offices [involving the new company] in the next two years,” Oros said. Offices will be in states such as South Dakota, Delaware, New Hampshire and others, he said. 

The new business will provide Hightower advisors with nationwide with corporate and administrative personal trust services. It will offer a mix of personal trust investment management and custody and safekeeping products. This includes discretionary investment management services for managed accounts and non-managed accounts, custody and escrow services, and agency services such as administrative support for other fiduciaries, principals of partnerships, limited liability companies and other legal entities. The president of Hightower Trust Company will be Tanya Simpson, who was formerly managing director at Charles Schwab Trust Company and Charles Schwab Trust Company of Delaware. 

The trust company will be led by a board of directors chaired by Stephen Strake, senior MD of Hightower Texas. Internal board members are Cat Davies, Hightower chief solutions officer; Scot Kees, Hightower chief administrative and legal officer; and Tanya Simpson, president of Hightower Trust Company. Independent board members are Cathy Lemieux, former head of the Federal Reserve Bank of Chicago's Department of Regulation and Supervision; Dawn Causey, retired general counsel of the American Bankers Association; and Tim Divis, retired regional counsel for the FDIC's Chicago Regional Office.  

“We expect this to be an area of staffing growth. This business is certainly not a loss leader,” Oros said of the new business offering. 

“Today, there’s a bigger premium on financial planning,” he said.