Pete Swisher, a four-year veteran at Unified Trust, is vice president of wealth management and advisor services. He says that UTC's services are becoming an easier sale with advisors who are looking for the type of hands-on investment management only firm's that accept active discretionary duty can provide to 401(k) plans and their participants. "As one client said to me, 'Everyone else who comes in talks about their funds and their platforms.' You're taking control and giving advice instead of not taking control and advising us not to," Swisher says.

That has made recruiting new advisors a pleasure, says Swisher, who was in Iowa and en route to Boston, New York City and Dallas to meet with advisors when we spoke. The UTC advantages Swisher talks about-open architecture, a formal and optimized investment selection, revenue neutrality, total transparency of fees, 100% pass-through of revenue sharing and fiduciary oversight-have advisors and their clients paying attention.

Still, there are challenges. Just as everyone and their sister wants to be a fee-based advisor these days, UTC's competitors are catching on to the "fiduciary" buzz. "What's getting confusing for clients is that every vendor is rushing to market with so-called fiduciary solutions," Swisher explains. "The difference is, we're a full discretionary trustee. The co-fiduciary models that are popping up still leave investment responsibility with the plan sponsor [the employer]. They really don't have the story to tell but if you say, 'Well be co-fiduciaries,' to a client that may sound the same. The problem is they'll still be on the hook. With our model, we're the ones who are liable."

Unless a firm is a national trust company, they can't offer active fiduciary discretion. Which means that duty resides with plan sponsors, many of which are ill equipped to select or fire fund managers. Which is precisely why a traditional investment advisor model just wasn't going to work for Kasten. "With the advisor model, we were hamstrung," says Kasten, who received his CFP certification and his MBA from the University of Kentucky. "We could not offer active discretionary services. We couldn't pick portfolios. If you want to solve the problem of people not being able to retire and advisors we worked with recognized that the old model is failing you have to be able to control fund selection, create portfolios and manage fees."

Kasten may make starting a trust company sound easy, but it was anything but, says Michele Hardesty. Kasten launched his advisory business in his home's basement in 1985, and Hardesty was his first employee, hired in 1993. Early on, Kasten alternated a week working as an anesthesiologist with a week running his fledgling advisor shop. But he was nothing if not diligent. By 1992, he was overseeing $70 million.

"By that time I had seven years of experience under my belt and could see that this was a viable concept," Kasten says. So he started hiring staff. He also had a mandate from his wife, who told him he had to pick one job and stick with it. He picked his advisory firm. He still manages the money of many of those first clients-the doctors and nurses he would proselytize to about investing.

"I was pretty skeptical at first," says Dr. Wayland George Blikken, a practicing anesthesiologist in Evansville, Ky.
"What does an anesthesiologist know about investing? He used to talk to us and it sort of made sense but I thought, 'This guy is doing medicine and this investing stuff? What the heck?'" But something about Kasten's earnest demeanor finally wore Blikken down. He was a resident in 1989 and has been investing with Kasten ever since.

At age 49, Blikken says that thanks to Kasten, he's on target to meet his goal of retiring in 10 years "if not before. I guess I was pretty lucky he trained at the University of Kentucky. I think it would have delayed my retirement if I hadn't met him. It would have been a pretty long learning curve for me," says Blikken.

"One of the advantages of anesthesia was that I had a fairly controlled schedule," laughs Kasten today. "I knew when I was on call or not. If I scheduled a meeting, I knew I could make it. My first client was a doctor. I still have him after 19 years. His portfolio has grown from about $12,000 to $4.5 million," says Kasten, who still maintains his anesthesiologist's license.

Never one to sit still, Kasten had barely launched his advisory business when he started to chafe at the fact that he had to get his mutual funds through a broker-dealer instead of being able to buy them directly. To gain direct access to the world of funds he wanted, he transformed his firm into Kentucky's first state chartered trust company (he had to help regulators draft the application forms) in 1994. Just three short years after that, he converted the firm into a national trust company-the only model that he believes allows him to shoulder active discretionary responsibility for retirement plan clients nationwide.