Investment Management

July 24, 2020

WHITEPAPER | Valuation of Independent Trust Companies

In this whitepaper we review the history of trust companies and how consolidation in the banking industry, changing consumer preferences, and favorable trust law changes have led to the proliferation of independent trust companies. We analyze the average trust company’s income statement and industry-wide trends, such as trust companies’ relative immunity to fee pressure. We consider valuation “rules-of-thumb,” and why they often fail to address the issues specific to a given firm. Finally, we consider the various valuation methodologies, including the use of discounted cash flow models and guideline public company analysis, and how the use of multiple valuation approaches can serve to generate tests of reasonableness against which the different indications can be evaluated.

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If You’re Not Succession Planning, Then Plan for Secession
If You’re Not Succession Planning, Then Plan for Secession
Succession planning within RIAs is increasingly tied to talent retention, client continuity, and long-term enterprise value. Firms that fail to provide clear leadership and ownership pathways risk losing key advisors, and the relationships and revenue tied to them.
When a Succession Plan Meets Reality
When a Succession Plan Meets Reality
RIA succession planning requires more than documented intent, it must withstand real-world pressures like financing constraints, governance challenges, and emotional factors. Firms that rigorously test these elements early preserve more strategic flexibility over time.
When RIA Ownership Structures Outlive Their Usefulness
When RIA Ownership Structures Outlive Their Usefulness

Gradually, Then Suddenly

Ownership structures in RIAs often decline gradually before problems become visible, leading to sudden impacts on value. Proactive planning and evolution are essential to sustaining long-term growth, talent retention, and client confidence.

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