Trust administration provides the key ingredient or secret sauce to any trust experience.
In this blog, I will briefly go over the key pieces to great trust administration. As a co-founder of an advisor-friendly trust company, we understand the frustrations advisors and beneficiaries have with a bank trust departments.
Let's start working through how trust administration works and why. Knowing this information and knowledge gives you the power to pick a trustee based on your terms.
Trust distribution guidelines in the trust document create the foundation of success or failure. Parents and grandparents must consider how trust distribution definitions fall under the supporting or enabling type. Having some plan leads to a balanced outcome for current and future generations.
Most financial advisors and clients are well aware of what directed trusts can do for them — mainly, provide flexibility on management of trust assets. There is a lot of 'noise' about directed trusts and explaining the hows, whys, why nots etc. is important for all to know.
The critical thing to keep in mind is that the trust industry is undergoing a quiet revolution that has wrested control of trust accounts away from traditional trustees — primarily banks and other large institutions — and back into the hands of independent trust companies, advisors, and (most importantly) clients.
Recently, we had a silly dispute on our weekly marketing call, Advisor vs Adviser, that sent us down a rabbit hole. It started with an argument on whether or not our recent email had spelling errors.
"Pretty sure its ER"
"It says OR in the company name, it's OR"
"Google says its ER"
panic.
This led to several more searches and our marketing team asking more questions. But, we got an answer:
Technically, Advisor vs Adviser means the same thing when describing financial services.
Regulators use the term Adviser to describe the process of providing investment advice. Comparatively, we view the term Advisor talking about the general description of financial advisors. Which made us think, could this make a difference in your marketing?
Millennials will challenge you. This is a good thing. If you don't adapt to different generations, wants and needs, you have a fuzzy problem. Traditional companies have a hard time marketing to millennials and Gen Z-ers.
In our opinion, we believe corporate America generally misses the mark on how to market and to service these two generations. We admit our corporate trustee services are boring, though important.
Despite this, we are enjoying the process of adapting to the most engaging way to service these younger generations.
Some find it challenging to adapt. Frankly, that is the fun part of the business.
We all like to think we are the biggest and brightest stars in the wealth management universe, but the truth is, there is a lot of competition out there. Much focus is given to adding new clients. However, it is equally important to keep those hard won accounts.
So, how happy are your clients? It is a hard metric to measure with most clients either too afraid or too kind to give true opinions, especially when directly asked by you. According to a 2014 Morningstar study, 55% of investors that were studied considered firing their advisor.
If that statistic didn’t wake you up, it should! So how do you retain your practice’s most prized possessions?
Here are three determining factors from a Spectrum Group study, which surveyed over 1,500 affluent households. (more…)
