As we rapidly approach the Association of Trust Organizations (ATO) Annual Meeting in Asheville in a few weeks, we thought we’d devote this week’s post to the rising popularity of independent trust companies in today’s market. Within the broader investment management industry, independent trust companies are carving out a significant niche, capturing the attention of high-net-worth clients and investment management professionals alike. While traditional banks still dominate trust administration, controlling over 75% of the market, independent trust companies are gaining traction due to their flexibility, client-centric approach, and ability to meet the complex needs of affluent families. For RIAs and wealth management firms, understanding the factors driving the rise of independent trust companies in 2025 offers valuable insights into how to enhance service offerings and strengthen client relationships. In this post, we examine the key trends driving the increasing appeal of independent trust companies and their implications for the broader wealth management landscape.

What Are Independent Trust Companies?

Independent trust companies operate outside the framework of traditional banks, providing specialized trust administration and fiduciary services tailored to the needs of high-net-worth and ultra-high-net-worth clients. Unlike bank-affiliated trust departments, which are often constrained by institutional priorities and regulatory complexities, independent trust companies focus exclusively on trust and estate planning. This independence allows them to offer personalized, agile solutions, making them an attractive option for clients seeking discretion, expertise, and customized wealth management strategies.

Key Trends Driving the Appeal of Independent Trust Companies

Several converging trends in 2025 are propelling the growth and appeal of independent trust companies, positioning them as a vital component of the wealth management landscape:

1. Rising Demand for Specialized, Bespoke Services

High-net-worth families increasingly require sophisticated trust structures to manage complex estates, minimize tax liabilities, and facilitate generational wealth transfer. Independent trust companies excel in delivering bespoke solutions tailored to individual client needs, such as multi-generational trusts, charitable trusts, or special needs trusts. Unlike banks, which often prioritize standardized offerings for institutional clients, independent trust companies can design highly customized plans that appeal to clients with unique financial goals. This specialization is particularly critical as the $68 trillion Great Wealth Transfer shifts assets to Millennials and Gen Z, who often seek tailored solutions to preserve and grow inherited wealth.

2. Regulatory Flexibility and Innovation

Recent changes in trust and estate regulations, including updates to tax codes and fiduciary standards, have created a dynamic environment that favors independent trust companies. Freed from the bureaucratic constraints of large banks, these firms can adapt quickly to regulatory shifts, offering innovative solutions that align with evolving legal and tax frameworks. For example, independent trust companies can implement creative trust structures to optimize tax efficiency or navigate new fiduciary requirements, providing clients with a competitive edge in wealth preservation. This agility enhances their appeal, particularly for clients wary of the slower, one-size-fits-all approach of traditional bank trust departments.

3. Perception of Fewer Conflicts of Interest

Many clients perceive independent trust companies as having fewer conflicts of interest compared to banks, which may prioritize proprietary products or cross-sell other banking services. Independent trust companies focus solely on fiduciary services, fostering a perception of greater transparency and alignment with client interests. This client-centric approach resonates strongly with affluent families who value impartial advice and objective decision-making. In an era where trust in financial institutions is paramount, the independence of these firms is a significant differentiator, driving demand among discerning clients. Many of them also do not provide wealth management or financial planning services, which makes them appealing to RIAs looking to refer trust services to a firm that won’t compete with them to manage their clients’ assets.

4. Technological Advancements and Client Experience

Independent trust companies are leveraging technology to enhance trust administration and client engagement, a trend that is particularly appealing to younger, tech-savvy clients. Digital platforms for real-time account access, transparent reporting, and streamlined trust management are becoming standard offerings. These tools not only improve operational efficiency but also cater to the preferences of Millennials and Gen Z, who expect seamless, technology-driven interactions. As the Great Wealth Transfer accelerates, independent trust companies that invest in cutting-edge technology are well-positioned to attract and retain the next generation of wealth holders, further boosting their appeal.

5. Alignment with the Great Wealth Transfer

The ongoing transfer of an estimated $68 trillion from Baby Boomers and Gen X to younger generations is reshaping client expectations in the wealth management industry. Independent trust companies are uniquely equipped to address the needs of this demographic shift. Younger clients often prioritize integrated wealth management solutions that combine investment advice with trust and estate planning. By offering holistic, client-focused services, trust companies can build strong relationships with these heirs, ensuring long-term loyalty and positioning themselves as trusted partners in the wealth transfer process.

Implications for RIAs and Wealth Management Firms

The growing appeal of independent trust companies presents significant opportunities for RIAs and wealth management firms to enhance their service offerings and strengthen client relationships. By partnering with or integrating services from independent trust companies, RIAs can:

• Expand Service Capabilities: Offering trust services through partnerships allows RIAs to meet the complex needs of high-net-worth clients without developing in-house expertise, enhancing their value proposition.
• Strengthen Client Retention: Providing comprehensive solutions that include trust and estate planning can improve client retention, particularly as younger generations inherit wealth and seek integrated wealth management.
• Capitalize on M&A Opportunities: The rise of independent trust companies has sparked an increase in merger and acquisition activity, as noted in the Q2 2025 RIA M&A trends. RIAs can explore partnerships or acquisitions to tap into this high-margin, recurring revenue stream.
• Appeal to Younger Clients: By aligning with tech-savvy independent trust companies, RIAs can cater to the preferences of Millennials and Gen Z, ensuring relevance in a changing demographic landscape.

Challenges to Consider

While the opportunities are compelling, RIAs must navigate challenges when engaging with independent trust companies. Regulatory compliance remains a critical consideration, as trust administration involves complex fiduciary responsibilities and typically involves a different regulator. Additionally, RIAs must ensure cultural and operational alignment when forming partnerships to avoid friction in client experiences. Finally, the upfront costs of integrating technology or pursuing M&A transactions may pose short-term challenges, though these investments often yield long-term benefits.

Conclusion

In 2025, independent trust companies are redefining their role in the wealth management ecosystem, driven by demand for specialized services, regulatory flexibility, perceived independence, and technological innovation. Their growing appeal reflects a broader shift toward client-centric, agile solutions that resonate with high-net-worth families and the next generation of wealth holders. For RIAs, aligning with this trend—whether through partnerships, technology adoption, or strategic acquisitions—offers a pathway to enhance service offerings, strengthen client relationships, and remain competitive in a rapidly evolving market. As the Great Wealth Transfer accelerates, independent trust companies are not just a niche—they’re a cornerstone of the future of wealth management. We hope to see some of you at the ATO meeting in Asheville next month to discuss these topics.

About Mercer Capital

We are a valuation firm organized by industry specialization. Our Investment Management Team provides valuation, transaction, litigation, and consulting services to a client base consisting of asset managers, wealth managers, independent trust companies, broker-dealers, PE firms, and alternative managers.