Why Your Firm Needs to Offer Trust Services
Over the next 30 years, an estimated $30 trillion in assets will pass from baby boomers to the next generation. Wealthy clients are planning for the ultimate disposition of their assets. In many cases, these estate plans utilize trusts and trust services to control how the assets are distributed to spouses and children.
Advisors risk losing their most important clients to large financial organizations if they don’t have the ability to serve as a corporate trustee.
Additionally, a 2015 Investment News survey found that 66 percent of children fire their parents’ financial advisor upon receipt of inheritance. For advisors with aging clients, the risk is clear. However, where there is risk, there is also opportunity. Advisors who are able to provide trust services stand to benefit.
Advisors with trust services are not only better able to retain current clients, but also attract new clients and additional assets from current clients.
A frequently cited study concluded that 70% of family wealth disappears after the second generation, and 90% is gone after the third. The fact is younger generations are often not capable of responsibly managing significant wealth. By creating a trust, the client can both retain their trusted advisor and control how their assets are distributed to heirs. A trust contains specific instructions (essentially, a road map) that control how assets are invested and distributed.
Most of the big institution trust departments are unable or unwilling to work with independent wealth advisors. Additionally, estate planning attorneys are increasingly hesitant to name a large financial institution as trustee due to a well-known record of high employee turnover, poor client service and investment management.
Counsel Trust understands that clients naturally prefer their trusted advisors’ continuing asset management after they are gone. The ability to offer trust services enables your clients to maintain the vital asset management and relationship they so value. Continuing your role as an advisor (or in some cases, trust protector), you can impartially assist the trustee to ‘stand in the shoes’ of your client when faced with making sometimes challenging distribution decisions.