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CI to Open Trust Company in South Dakota

The application to open a trust company is the Canadian financial services firm’s latest development in a busy two years after first entering the U.S. RIA space.

CI Private Wealth, a CI Financial subsidiary, is applying for a charter to operate a South Dakota–based trust company to offer CI clients trust options through its national wealth management platform. 

According to CI CEO Kurt MacAlpine, the move will enhance CI Private Wealth’s client experience.

“CI Trust will offer comprehensive, customized administrative trust solutions designed to satisfy each client’s goals, while (CI Private Wealth) manages the trust’s assets to ensure alignment with the client’s overall wealth management plan,” MacAlpine said.

CI’s application for a charter to establish its trust company is the latest development in a busy two years since the Canadian financial services firm first entered the U.S.’ RIA market in January 2020 by acquiring a majority stake in the Phoenix-based RIA Surevest Wealth Management

Last November, CI Financial announced it would acquire RegentAtlantic, a New York RIA with $6 billion in assets under management. The wealth management firm continued its expansion in February by acquiring Corient Capital Partners, a $5 billion AUM firm based in Newport Beach, Calif. Once ongoing acquisitions are finalized, CI Financial’s U.S. assets will total about $134 billion; to date, it’s made 32 U.S. deals.

Last month, the firm announced it would take its U.S. wealth management business public, selling up to 20% via an IPO that will be a U.S.-listed subsidiary of the publicly traded firm. According to CI Financial, the firm will file a form S-1 with the Securities and Exchange Commission this year, and will use the money from the IPO to pay down debt; the firm will also maintain a majority interest in its U.S. wealth business. CI began trading on the New York Stock Exchange in November 2020 and is planning to open its U.S. headquarters in Miami in 2023.

According to MacAlpine, the new trust company will help the firm build on other service offering enhancements, including its Family Office Services platform released earlier this year, which MacAlpine had said completed about 1,000 tax returns for clients thus far.

“Establishing CI Trust is an important step in our mission of building the country’s leading wealth management firm for ultra-high-net-worth and high-net-worth investors,” MacAlpine said.

South Dakota has become an increasingly attractive locale for trusts of the wealthy. The Washington Post reported in October of last year that assets in trusts in the state quadrupled to more than $360 billion in the past decade. The state is attractive as a tax haven for trusts due to its lack of state income or capital gains tax, and tax-free investment gains on assets, as well as anonymity for trustees.

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