Customer demand often drives the launch of new products, but when Quad City Bank & Trust decided in 2006 to launch its own family office services for ultra-high-net-worth customers in response to interest from a prospective client, the bank's trust department wasn't sure where to start. "The concept was so new in banking, there wasn't a structure to follow," recalls Chad Lewis, wealth management VP for the Bettendorf, Iowa-based institution.
To establish the family office, Lewis teamed with trust department colleague Paul Schmitt, who had eight years of family office experience with a previous employer. The pair first approached the bank's existing trust accounting ASP vendor about adding family office functionality. But technical barriers were prohibitive. "Next, we attended a family office seminar and discovered most of the technology solutions in our range were targeted to hedge funds, not banks," Lewis says.
By early 2008, Quad City Bank & Trust ($1.8 billion in total assets) had identified two possible vendors. "One required a third-party solution to integrate its family office application with our vendor's trust accounting system," explains Schmitt, assistant VP and trust officer. "But we weren't comfortable with three vendors moving information between trust accounting and family office."
The other provider -- Wayne, Pa.-based SunGard -- suggested replacing the bank's existing trust accounting provider with a combination of its own ASP-delivered solutions: Charlotte for trust accounting and the iWorks Enterprise Accounting System (EAS) for family office analysis and reporting, as well as WealthStation for acquiring, servicing and growing client relationships. "Although it was an attractive solution, we had to justify to ourselves the dissolution of a successful 14-year relationship with our existing trust accounting vendor," Lewis notes.
Change for the Better
Determined to add family office functionality, Quad City Bank & Trust began the Charlotte integration in May 2008 and went live with the solution six months later. Since the old and new accounting systems were both Microsoft (Redmond, Wash.) Windows and SQL-enabled, no additional infrastructure investments were required, Schmitt relates. Similarly, existing servers would accommodate iWorks and WealthStation.
"If there's one thing we'd do differently, we wouldn't have rolled out in November," notes Schmitt. "Due to year-end tax season, people didn't have time to become immediately fluent with the system."
Also at the end of 2008, the bank's first family office customer came aboard. But because iWorks was not yet deployed, many of the tasks related to that customer were performed manually, Lewis concedes. "Ideally, we'd have rolled out family office by moving an existing customer, whose records were already in Charlotte, into iWorks," he says. "However, building out iWorks while simultaneously integrating all the external data sources for a new customer became an excellent way to learn about the capabilities of our new platform."
By October 2009 iWorks was fully deployed and the family office services were officially launched. Among other benefits, the iWorks/Charlotte combination has slashed family office check processing times from about a week to just a couple of days, Lewis reports. "Multiply that by the several hundred checks we cut every month, and the savings are significant," he says. "Plus, when needed, we can cut a check within an hour."
The trust department is equally pleased with the transition to SunGard. "For the most part, our staff wishes we'd done it sooner," relates Schmitt. "In addition, networking issues for our IT staff have been reduced because Charlotte is more stable than our previous solution."
As its family office practice continues to grow, Quad City Bank & Trust currently is implementing WealthStation. "Since going live, we've added to our client base," reports Lewis. "Even though the amount of data we handle for each customer is exponentially more than a single standard trust client, our three-person staff is managing the workload efficiently due to SunGard's capabilities. In fact, we're on target to meet our goal of adding two new family office customers per year."
Institution: Quad City Bank & Trust (a subsidiary of QCR Holdings, Moline, Ill.).
Assets: $1.8 billion.
Business Challenge: Establish a family office to attract and retain ultra-high-net-worth customers.
Solution: SunGard's (Wayne, Pa.) Charlotte trust and investment management system and iWorks enterprise accounting system (EAS).