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Lord
& Carter
PROFESSIONAL BOARD OF TRUSTEES:
Trustee Services and Training Available.
Lord & Carter Professional Trustees
are Trustees in the old fashioned sense. They are trained to assist
individuals and families in achieving financial strength. Lord &
Carter's Professional Trustees function as educational consultants as
well as Trustees. It is their goal to promote communication between
family members and to guide individuals and families toward taking full
financial responsibility for themselves individually and collectively.
Lord & Carter's Professional Trustees can evaluate
any situation, diagnose any potential problems and outline a solution
to those problems in order to and strengthen the Trust structure.
Lord & Carter's Professional Trustees do not offer
investment advise. In a Private Trust Company this becomes the responsibility
of the family or individual establishing this structure.
The following criteria must be present in order for
Lord & Carter's Professional Trustees to agree to serve as a trustee
on a particular Trust:
(1.) Minutes must be up to date;
(2.) Complete financial records must be maintained with account files
structured on the same Schedule C businesses use on a 1040 (personal)
income tax form;
(3.) Quarterly financial statements must be sent to the Office of Trustee
on a regular basis;
(4.) All actions by any Trustee must be authorized by all members of
the Board of Trustees... This is done in the form of a minute signed
by all Trustees;
(5.) The Board of Trustees must evaluate the function of the Trust annually
as to the purpose of the Trust... This is an "In House" audit
of Trust activities;
(6.) Amendments tot he original contract agreement must be signed by
all members of the Board of Trustees.
FIDUCIARY
PROFESSIONS
Trustees for the wrong reasons
By Ian A. March
Too many are in the business just to win assets under
management. That's more foolish than they realize. It's also bad for
the clients.
How often do we hear these days: "Well, you have
to understand, we're not really in the trust business for the trustee
fees"; or "We are a bank. Trusteeships are just an adjunct
to our core business"; or "What new assets will we bring under
management if we take on this trusteeship?"
Perhaps it was inevitable, Precipitous falls in the
financial markets (equal falling revenues) and the incessant stream
of new regulations (equal rising costs) have led all in the private-wealth
management business to focus more closely on the costs and benefits
of both new and existing business. But rather than give up the trust
business, many institutions seem determined to retain it primarily as
a means of getting more financial assets under management. It's an alternative
"wrapper" to offer clients, one that is seemingly perceived
as low-risk to the institution.
That is strange, considering trust litigation has been
on the increase and is likely to boom with the enormous generational
shift of wealth that will occur in the next five to 10 years. To opt
to stay in so high-risk a business while pricing as if those risks did
not exist is a perilous course to follow.
And where does this approach leave clients, those who
need trustees to hold family businesses with no aspiration to public
offering (still the most common model globally) or hold their real estate,
yachts, aircraft, art collections and all of the other non financial
assets classes that so typify multi generational wealth?
And where does this approach leave those who need trustees
to provide continuity and support in managing their families through
the generations, to mediate between the differing expectations of the
current generation and the next, as well as between the competing claims
of siblings and, in time, cousins, to the family fortune?
Where for that matter does this approach leave those
who still look to a trustee to bring objectivity and independence to
their family's affairs, to keep investment managers on their toes and,
if necessary, to fire them?
One-stop shopping may appeal to some, but there is undoubtedly
an enormous market for more traditional trustees.
In my experience, the best-rewarded trustees always
have been those prepared to do the hard job: spend time getting to know
the family's needs, help achieve their objectives and do so with independence
and an ability to stand their ground when necessary. The trustee is
not necessarily popular with all family members. But as a client once
said of his trustee, he is " the string on our balloon."
Perhaps the family-office model offers a solution. Perhaps,
as the financial sector continues to consolidate, trust operations–increase–business–will
spin off and return to the business for which they were originally founded.
Perhaps other institution will see the possibilities in high-end trust
business (well managed and priced to reflect the risk) and allow their
trustee subsidiaries greater independence. Perhaps insurance coverage
for trustees' breach of duties may offer and alternative solution.
Clearly, there is still an enormous market for the old-fashioned
trustee. I look forward to meeting those willing to embrace this challenge.
By Ian A. March
From: Trusts & Estates / trustsandestates.com May 2003
If
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