Serving Families Through Advisor-Friendly Trusts with Jonathan Connolly and Christopher Holtby

If your clients rely on trust planning, the fiduciary relationship has to be more than technically correct. It has to be responsive, collaborative, and clear.

In this episode of Judicial Dollars and Cents, you hear from Christopher Holtby and Jonathan Connolly of Wealth Advisors Trust Company about what it means to build an advisor-friendly trust company. They share how the firm was created during the financial crisis, why responsiveness matters so much in fiduciary work, and how attorneys and financial advisors can collaborate with a trustee without losing the client relationship.

You will learn how the right trust company relationship can support estate attorneys, financial advisors, beneficiaries, and families through complex planning decisions. Christopher and Jonathan also discuss AI in a regulated fiduciary environment, South Dakota trust advantages, directed trust structures, generational planning, and why families often need more than a commodity trustee relationship.

Listen to this episode of Judicial Dollars and Cents: Serving Families Through Advisor-Friendly Trusts with Jonathan Connolly and Christopher Holtby 

Jonathan Connolly is chairman, president, and COO of Wealth Advisors Trust Company, bringing more than 30 years of financial and fiduciary experience in trust and estate services.

Li: https://www.linkedin.com/in/jonathan-connolly-aif%C2%AE-atfa-18bb2034/

Christopher Holtby is the co-founder and chief fiduciary strategist of Wealth Advisors Trust Company, an advisor-friendly trust company headquartered in South Dakota and serving advisors and clients nationwide.

Li: https://www.linkedin.com/in/christopherholtby/

Connect with Christopher Holtby, Jonathan Connolly, and Wealth Advisors Trust Company:

Website: https://wealthadvisorstrust.com/

LinkedIn: https://www.linkedin.com/company/wealth-advisors-trust-company-south-dakota-trustee/

Facebook: https://www.facebook.com/wealthadvisorstrust/

YouTube: https://www.youtube.com/@southdakotatrust/videos

Judicial Dollars and Cents, a podcast hosted by Anders Partner and Virtual CFO, John Scott, focuses on helping law firms win high-stakes cases with smarter financial strategy. The show breaks down the key metrics, financial frameworks, and decision-making systems that drive stronger case outcomes and firm performance.

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John C. Scott, CPA, AEP, is a Partner in Tax and a leader in legal industry financial strategy by Anders. He helps law firms win high-stakes cases with smart strategy by delivering clear financial insights, identifying key performance indicators, and strengthening decision-making at every level. With deep expertise in estate planning and financial analysis, John works closely with attorneys and firm leaders to align financial goals with long-term business success and case readiness. His approach brings scalability, flexibility, and data-driven clarity to complex legal environments, helping firms stay focused, prepared, and competitive.

Connect with John C. Scott:

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Transcript

SPEAKER_02 0:00

Welcome to Judicial Dollars and Cents, brought to you by Anders virtual CFO services team from all across the United States. I'm John Scott, and in each episode, we'll shine a light on the financial side of the legal world, turning law firm numbers into impact-driven stories. From taxes and profitability to practice growth and leadership, we sit down with law firm innovators who are shaping the future of the profession. Let's dive in right here on Judicial Dollars and Cents. Hey, welcome back to Judicial Dollars and Cents, the podcast where we dive into the business side of running a law firm. I'm John Scott with Anders Virtual CFO Services for Law Firms, and each week we talk with industry experts who help law firm leaders think differently about growth, profitability, and performance so they can build practices that last. Today we have two guests. We welcome Christopher Holtby and Jonathan Conley. Christopher is the co-founder and chief fiduciary strategist of Wealth Advisors Trust Company, an advisor-friendly trust company headquartered in South Dakota and serving advisors and clients nationwide. He focuses on building scalable fiduciary systems and helping advisors navigate complex trust challenges. Jonathan Conley is chairman, president, and COO of Wealth Advisors Trust Company. With more than 30 years of experience in trust and estate services, he has led corporate trustee businesses within major financial institutions and is known for building high-performing teams and advancing fiduciary strategies that strengthen long-term client relationships. Christopher Jonathan, welcome to the show.

SPEAKER_01 1:33

Afternoon, John. Hey, thanks for having us.

SPEAKER_02 1:36

Hey, I really like to hear people's origin stories, how they came to where they are today. So, Christopher, could you start us off with your story?

SPEAKER_01 1:45

So in 07, about November of 07, me and one of my buddies, uh Chuck Sharp, we were just catching up. And one of his friends, an advisor, got fired because he didn't read the revocable trust. Client died, and the successor trustee was a particular bank, and you know, $12 million walked out the door. So I said, Chuck, great, thanks for that. And in April of 08, he told me another story. So again, Bear Stearns has gone belly up, JP Morgan bought it, no one knows what's about to hit. And Chuck goes, Holt me, we should start a trust company. I'm like, nah, that's a dumb idea. He goes, No, no, no, no, no, no. And so me being ADD, I just said, All right, I'll figure it out. And by September of 08, we figured it out. And by November of 08, uh the bank regulator said, you're approved. And again, the world's falling apart. And being entrepreneurs, we just like, all right, well, it is what it is. And in May of 09, we got our first client. I think it was like a $136,000 trust. And we're like, awesome. But the essence of why we started was to give lawyers and advisors something they'd never seen before. Just a kind and responsive trust company.

SPEAKER_02 3:19

And I love the collaborative approach that it sounds like you have because you know, so many times in an estate planning situation, you have different team members working for the client. And unless they're talking and communicating and there's a quarterback directing everybody but keeping everyone in the loop, you're not really serving the client well.

SPEAKER_01 3:41

And so we got to a point where we grew to a point where we just needed to get to the next level with a level of sophistication. And John and I have known each other. We were collegial competitors. And you know, it's a small industry, and we all, I mean, we compete, but we get along, or at least the nice people do. And so um John uh joined us in August of last year, and so we're really excited about what's the next level. And I think the most important thing John said was I want the client experience and the employee experience to grow at the same levels we grow. And if they don't, we have failed.

SPEAKER_02 4:25

That's a great philosophy, Jonathan. What what did you do before last year when you joined?

SPEAKER_00 4:31

Yeah, I've had a uh a long career in the financial industry along with the wealth management side of the business for so long. And I really fell in love with the personal trust space about 15 years ago. Um I had an opportunity um at a firm called RBC Trust out of Delaware. And it was at a time where um my wife and I just settled down, we just built our house, had our, we were welcoming our first child. And it was one of those things that I I always had a passion for because I did go to school uh for law. Um I I had a you know a really interest in helping others uh in planning for not only um their retirement, but also for the next generation. And I stumbled upon, yeah, an opportunity with RBC and and really learned a lot about this third-party space, which is completely different than the captive trust model, right? And it was a way to partner with attorneys and financial advisors and providing a solution that was working alongside experts in the industry, in my opinion, and giving that fiduciary guidance and understanding as to what a trustee can do, but stay in our lane as being a fiduciary, and then partner with somebody that provides that investment expertise and that uh legal expertise and working as a team. And I just fell in love with this whole career path in the third-party space and um had a lot of different um opportunities throughout my career and ended up with a group of uh five great gentlemen uh that had a lot of similar passions and outlook as far as what I thought about the third-party industry. Uh, and it certainly appealed to me uh to join Wealth Advisors Trust Company. And and as Christopher said, you we have uh been staunch competitors for a number of years, but one thing that we always uh saw was a similar compassion for this space, so wanting to do more uh and and be that difference within the industry that I think most people view as cold, uh not thoughtful, not responsive. And Christopher and I, as well as the other owners of Wealth Advisors Trust Company, are certainly aligned in providing it a different flavor in the industry as far as being kind, being considerate, thinking about not only the experience with our financial advisors, but also families. Uh that and that's critical for us because I think that's where we will definitely separate ourselves as we continue to grow our business of being a kind and considerate trust company.

SPEAKER_02 7:21

So you all describe it as being advisor-friendly. Can you give me some examples of how you're advisor-friendly as compared to some of your competitors?

SPEAKER_00 7:31

Well, I think the first thing that advisors are looking for, and this comes from my time at UBS when I was running their trust and estates division, is number one, an advisor expects a partner to see things the way they see it. Making sure that you're serving the client as well as they serve the client. And one of the things that we have experienced over our careers as premier fiduciaries is responsiveness. Understand what the advisor's expectations are and deliver, not just deliver, but exceed those expectations. And one of the first things I've learned in my career is if you're not responsive to the advisor and their needs and especially their client needs, they're not going to partner with you. They're going to look for something else. And what we've seen across the industry for so many years is a lack of focus and intensity of trust companies really focusing on the advisor's needs. They focus primarily on the beneficiary's needs because, of course, that's what the primary responsibility of a trustee is to serve the client. But in our world, especially a wealth advisors trust company, we look at our clients as not only the beneficiaries, but also the attorneys and the financial advisors on the relationships.

SPEAKER_02 9:00

So who's the ideal prospect for your firm?

SPEAKER_01 9:04

I would say if you are an estate attorney, if 100% of your focus is on wealth and estate planning transfer, that's an ideal um client profile. If you're a financial advisor, if you have the average age of your clients is 55 and older, the um you have more than 60% of the assets in non-retirement assets. And if you have more than 40% as business owners, and if you also do legacy planning, that's an ideal client profile on the advisor side. And so if you break apart what a trustee does investments, distributions, taxes, and other admin stuff, we just do three of those things and then we collaborate, and then the advisor is really the relationship manager with the client. So there's nothing dislocated. And an example would be if you're doing distributions, the distributions isn't us saying, hey, give us a budget, it's one year, and then next year you got to give us another budget. What we do is we tie the distributions to the financial plan and the legal document, so the two work together and they're not disjointed. Because it's being disjointed, the clients like on a Ferris wheel. Wait, which way is up? They're all confused. And so this way, it's very straightforward how everyone's playing a part, and we all like each other. So it's an easy collaborative relationship.

SPEAKER_02 10:45

So attorneys that specialize in estate planning, probate issues, those are good clients, and then financial advisors with older clients with high net worth, and they do legacy planning. That's awesome.

SPEAKER_01 10:58

Yeah.

SPEAKER_02 10:59

So how do you incorporate in this age of AI and ever-changing technology? How do you incorporate technological platforms into what you're doing?

SPEAKER_00 11:12

I think it's a balance at this time, John, right? So, I mean, one of the things that we're fully aware of that yeah, AI is a great tool. I think where we're seeing it primarily used is to uh look at operational efficiencies in our business, uh, in addition to assisting in how best to position and market our services to raise awareness in digital media. Um but keep in mind we are a highly regulated industry. And actually, we just came off our most recent exam with the South Dakota regulators. And this is still an area that's being explored, that's being questioned, that's being challenged, and making sure that we as fiduciaries, we still have run a human practice. I mean, we still have to make decisions based upon our experience, based upon law, based upon what uh the grantor's intent is. Uh, and there's precedence already set. So what's great about our industry, AI will never remove the responsibilities that we will ever have as a fiduciary. First and foremost, I think there will always be a need for what we provide to our advisor clients and attorneys as well as beneficiaries. Um, but how we look at AI is a tool to help create efficiencies in our business. So, yeah, we're we're looking at ways to help best to implement AI in our practice today.

SPEAKER_01 12:45

And you know, John, if we learn anything from COVID, people like people. And totally agree there. And it's an amazing little thing. I mean, if we think about, John, if you think about Thanksgiving dinner with your family and friends, or Christmas, or you know, watching St. Louis beat the Eagles if they ever play together or they ever play against each other all the time. People like people. So when you are dealing with a trustee, you want people that are curious and creative, and this magical things happen when everyone is curious and creative, and attorneys love working with trust companies that have that, and it comes down to time, which is what John's building out on the other side. If you have time, your natural ability to relate and to be curious and to be creative is just an amazing thing. And so that's the one thing lawyers are always amazed about is how quickly we can respond and how creatively we can respond. So our first answer isn't no. Our first answer is well, let's just figure it out. Maybe, maybe the answer it's possible, maybe it's no, but let's give it the old Gipper good try and see what we can come up with because we have the time, and that's what John is help building out on the other side.

SPEAKER_02 14:11

Well, I gotta tell you, creativity and responsiveness are two things that are sorely lacking in a lot of professional service firms today, and that is very refreshing that that's a focus of you guys because the fact that you can get communication back and not just have a what I'll call a CPA auditor mentality of you can't do that. It's like I'm a tax guy from my beginnings, and I always hated it when the auditor said no. I said, Well, wait a minute, can't we look at it a different way and figure out a way to do it? So I do appreciate the creativity and then and not just straight to no. And the collaborativeness um I think is really important. The fact that I found with my high net worth clients that they call the trust officer first because they're not getting charged by the hour, right? And then the trust officer calls the attorney and the CPA to fill them in on what just happened. But in reality, everybody's getting paid. It's just a different structure. How do you charge for what you do? So that was a question. How do you charge?

SPEAKER_00 15:20

Yeah, so uh what's great about our business is depending on the responsibilities that we have on the trust first and foremost, John dictates how we charge. So across our industry, typically trust companies charge for the assets, the market valuation of the assets are within the trust. Now, for us, we then take it a step further and say, okay, what are we actually responsible for on those assets? Uh there are two specific veins that we look at. There's the vein of being a delegated trustee where we do perform investment oversight of the assets. We hire a financial advisor on our behalf, who typically is the one that introduced us to the relationship to begin with, right? But we still are in essence responsible of overseeing the asset allocation and what the financial advisor is doing, right? But we don't get involved in the day-to-day trading if they want to um go out and buy a specific opportunity within the marketplace that uh is performing really well, or they're taking information that their portfolio managers are advising them on as opportunities in the marketplace. So we don't get involved in the day-to-day. We sit up top and just observe as far as what they're doing and making sure it's adhering first and foremost the document and also what we position with them and work collaboratively with them as the asset allocation overlay. So that's the delegated trust model. And we charge basis points on that model for the total valuation of the trust. Then in South Dakota, we have this cool thing called a directed trust, right? And it's a feature that's also provided in some states across the country. There are the big seven states like South Dakota, Delaware, New Hampshire, Alaska, Nevada, Wyoming, Tennessee. We we have very strong directed trust statutes that allow a third-party individual to say, hey, I have investment expertise. I am comfortable with having responsibilities over directing you, the trustee, on the types of investments being held in the trust. And typically what we'll see with those investments, either concentrated positions, maybe riskier type or speculative type of investments. Uh, we also see business assets, LLCs, car collections, commercial real estate, oil, gas, mineral rights, all those types of things you can put into a directed trust. And all we're performing, John, is we're giving nexus to a great state like South Dakota that allows that structure. But then we're serving as an admin trustee. So we're just performing administrative functions, but not overseeing what the investment direction advisor or trust advisor, it's called, is doing as far as uh those investments, selling those investments, adding, buying those investments. And um, we don't have responsibility or or oversight as far as those investments are concerned. And in those structures, we tend to look at more of a either a basis point structure if it's not held in the LLC or entity arrangement. If it is held in an entity, we'll we'll charge a flat fee. So again, it's that collaborative approach of writing, finding the right fit for the opportunity and for our relationships.

SPEAKER_01 18:42

You know, and John, can I add one thing? There are a lot of states that are adding director trust language, like Ohio, like Texas, like Arizona. They're basically buying a pair of work boots and thinking they can run a marathon that South Dakota can run in running shoes. So their director trust laws within their property code are clunky and not really OCD very, very specific. They say they have it, like running a marathon in work boots, but it's gonna beat the heck out of you and your feet, and it won't give you what you really want. So, for example, there's one bank in Texas, they charge the same in a fully discretionary trust versus a directed trust, which tells you their lawyers said, yeah, the dirt the Texas directed trust laws are really not that good. They're very general, whereas the top seven states that kind of follow a W Alaska, Nevada, Wyoming, South Dakota, Tennessee, Delaware, New Hampshire, right? A W, they're O C D.

SPEAKER_02 19:50

So Well, and the subsequent states are a little bit late to the game. I mean, I know Jonathan Blottmacher has been a big advocate of the Alaska Trust, and you know, he's been talking about that for years. Yeah. Hey, so trust and estate planning is ultimately about relationships and and typically over multiple generations. Do you ever get into any generational planning or facilitating? A lot of times the older generation with all the money is going to transition that wealth down, but they want also want to impart their their values, their charitable intent. Do you guys ever get involved in that? Or do you see anybody that's really doing it well?

SPEAKER_01 20:30

So I uh was in Phoenix yesterday working with an advisor and the husband and the wife and the attorney, and we were planning out the letter of wishes tied to the estate plan. And I actually spoke um last October at an event where Jay Hughes was also talking about, and talking about trustee being a partner, not a policeman. So a lot of time, which is why we call ourselves fiduciary strategists, is we're working with the advisor or the attorney and their client in the room at the table, strategizing what does family harmony mean? What is the the philosophy of their wealth and their family? And and how do they transfer that over the next 200 years in some cases? And I was an advisor for 25 years, so sitting at a kitchen table is a really normal process, and so we're actively involved in that and should be, right? Because it needs to be a very collaborative process.

SPEAKER_02 21:36

Well, and it's so important because the generation that created the wealth typically came from meager means. Yeah. And they don't want to spend it, they want to be good stewards of it. And then the next generation and the one behind that never had that suffering. And so when they're dumped additional wealth, it it doesn't always last. So you have to impart those values and and really educate the younger. Generation on that. Hey, so so looking ahead in the trust and estate arena, do you see anything on a horizon? Like Missouri is uh exempting capital gains from income tax inside a trust in 26 and forward. And they're also doing some other things with respect to uh their income tax. They want to replace it with a sales tax. But do you see anything legislatively that will change the landscape?

SPEAKER_00 22:30

Uh that's a great question, John. And I think every year we're we're starting to see um states trying to one-up other states, right? So um last year, year before, of course, we saw a lot of efforts done by California to address a lot of assets fleeing or are going to neighbor state Nevada, right? Um, and a lot of reasons for that, right? Because of course they didn't want to see wealth leaving the great state of California to another state, uh, and primarily because of tax reasons.

SPEAKER_02 23:04

Um I think the 13.5% income tax rate that they're foreign, but is the main reason, right?

SPEAKER_00 23:11

But now what we're seeing is California is also now introducing a directed trust statute, right? And and so each each year you do see another state that is not part of the big seven try to say, okay, we're gonna make it appealing for people to stay. And really what they're seeing is they want the the assets to stay in their state, the taxable assets to stay in their state, right? So they're trying to find ways that the other big seven have done for years and years and years to attract fiduciary business to those states. Will they ever catch up? I doubt it. Um but yeah, I think uh what we're seeing is yeah, you're you're seeing these pop-ups of states trying to compete with the big seven. And honestly, I don't think they'll ever catch up. It's it's really hard uh in this day and age to um compete with the likes of like what Mr. Blotmacher has created in Alaska or what Al King has created in South Dakota, or what Dick Nona has been uh discussing for years in Delaware. Uh and I could keep going on and on, Steve Oceans and Nevada, right? Like if you look at the this top seven states, there's a reason why people and the mass majority of wealth in this country have trust in those seven states.

SPEAKER_01 24:28

But I mean, John, the other thing you have to remember is these other states, California, Missouri, if you need a corporate trustee who has no conflicts of interest, right? Because we don't manage money, really their solutions kind of remind me of Kmart. They're going to the lowest level and they're always competing on what they do, which is a commodity, not why they do it. And so they're thinking like, oh, we're gonna be awesome because we have no capital gains tax, or California has a directed trust law. That's missing the point. What do the families want emotionally to make them feel this is good? And if you rest your laurels on the what versus the why, you're always gonna be playing catch up and you'll end up being like Walmart. Because we have to remember there's five trillion dollars sitting in bank trust department assets where they're managing the money. And to any advisor listening on this podcast, which I know there's many, all that money you can go after and take away.

SPEAKER_02 25:38

And we can't so right. I mean, people with money don't want Kmart or Walmart, and advisors don't want to serve people that do want Kmart and Walmart. So I want to provide a concierge service at a concierge service level price. And if that means I have fewer clients, then so be it. I'm much happier serving a client who I can overserve and they appreciate and they're willing to pay my fee. Hey, before we wrap up, I want to get to uh football, which is a passion of mine. I I love all levels of football from Pee-We on up to college and and pros. And I'm a long-suffering St. Louis football fan. Now I have season tickets for the Chiefs. Uh, Christopher, you're a Cowboys fan? No, I'm just kidding. You are a Steelers fan, correct?

SPEAKER_01 26:30

I'm a Steelers fan. It's the first city I lived in that had a um that had an NFL team, and I love the way the Rooney family made it focused on the fans, not just on them. And so that's my introduction to American football. So that's why I've remained loyal to the Steelers.

SPEAKER_02 26:50

And it's amazing to me that they're on their they're on their fourth coach. Yeah, I mean, you have some teams that in in three or four years have that many coaches.

SPEAKER_00 27:00

Yeah.

SPEAKER_02 27:02

And and John, you are an Eagles fan.

SPEAKER_00 27:06

I am an Eagles fan, yes.

SPEAKER_02 27:09

You guys put it on us a couple years ago.

SPEAKER_00 27:13

Well, John, I thought you were gonna answer Christopher about Kmart because I was surprised Kmart's still around, so I'm still stuck on Kmart.

SPEAKER_02 27:20

Um the only thing I know about Kmart is Kmart sucks, and that's from Rain Man.

SPEAKER_00 27:25

So But yeah, I I like the mention there, Christopher. Great job on Kmart. Um, but yes, a long time, long time Eagles fan. And and Christopher, I'm not really sure. Did you know back in World War II what was the name of the Pittsburgh Steelers? The Bumblebees? Actually, no. So during World War II, they actually joined with the Philadelphia Eagles. So for a period of years they were called the Steagles. Really? Are you kidding me? I'm not sure.

SPEAKER_02 28:07

Was that lack of lack of talent that they combined?

SPEAKER_00 28:10

Yes, they they had a shortage of talent, yes. So um, but yes, if you go back and look, yeah. All right, so they're all district steelers and the Philadelphia Eagles played together, and they're called just Eagles. Wow, okay. I learned something new today. Awesome.

SPEAKER_02 28:27

Guys, before we wrap up, if folks want to get a hold of you and your firm, what's the best way for them to do that?

SPEAKER_00 28:34

Yes, so um, you can visit our website at wealthadvisors.com. Uh, we actually just relaunched our website. There's a lot of great helpful tools and videos. You'll see Christopher with the beard and without a beard. Uh, just shows how long he's been doing this, John, uh, and providing some great thought leadership to attorneys and financial advisors across the country. Um, and also we're on LinkedIn. So um happy to connect with anyone about our services, how we partner with attorneys and advisors. Uh, we have a tremendous thought leadership as well. And yeah, happy to talk some Steagles football as well.

SPEAKER_02 29:14

So I'm gonna have to check that out. And and we'll put your website and your LinkedIn profiles in the show notes. So thank you both for joining. And thank you all for tuning in to Judicial Dollars and Cents. If you enjoyed today's episode, be sure to like, follow, and subscribe wherever you get your podcast. It helps us grow and helps ensure you never miss an episode. We'll see you next time on Judicial Dollars and Cents. Thanks for joining us on Judicial Dollars and Cents presented by Anders Virtual CFO Services. If you found value in today's conversation, be sure to follow or subscribe wherever you get your podcast. To learn more about how Anders helps law firms strengthen their financial foundations and drive growth, visit AndersCPA.com. Until next time, keep making smart decisions that make perfect sense.