Competition for wealthy clients has never been more intense, as wealth managers endeavor to enhance their traditional investment management services by offering more sophisticated investment, estate, financial, charitable and tax planning services to their best, most profitable customers.
In today’s market, advisors who want to differentiate themselves may need to offer the services that have long been the province of bank trust departments and corporate trustees.
As competition for high net worth and ultra-high net worth clients intensifies, advisors naturally want the competitive edge and management longevity that trust services can provide. Yet many firms are not able to meet the high capital requirements or retain the specialized expertise that an in-house trust capability demands. Private label trust services offer an easier, more cost-effective alternative for these firms.
Yet through the private label relationship, the client has outsourced all fiduciary administration and liability, including trust reviews and interpretation, investing standards, suitability oversight, income and principal trust accounting, tax reporting and discretionary decision making as governed by the trust document.
If your firm has the opportunity to manage significant trust assets, you may be a good candidate to establish a private label trust company. Owning a private label trust company enables your firm to market trust services using your distinct brand. Private label trust capability is a powerful vehicle for achieving ongoing, long-term multi-generational relationships with clients.
Private label trust services allow you to outsource all the aspects of creating a trust company to a third-party provider, while maintaining control of client accounts and relationships, including:
- Capital formation requirement
- A separate and distinct corporate structure
- Back office operations and information technology
- Specialized trust administration expertise
- Trust compliance; policies and procedures
- A state or national trust charter
There is no interruption in custody, administration, management or trading.