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Trillions of dollars will be transferring to the baby boomer generation over the next 20 years. As a result, clients and prospects are demanding more from their financial advisors beyond financial plans and managing the family’s assets.
To maintain the primary role with high-net-worth families, advisors must deliver support and advice in wealth transfer, trust services, estate planning, philanthropic giving and tax optimization. To meet and exceed those client expectations, advisors need to leverage and partner with outside providers specializing in these arenas.
As advisors engage with outsourced providers and resources to assist them in delivering this additional value to their clients, the quality and consistency of client service becomes the key differentiator. Simply “bolting on” providers to expand your scope of services and fill the gaps in your offering is no longer an option.
This is significantly relevant to unbundled trust administration solutions offered by “advisor friendly” trust companies. While the fundamental role of performing trust administrative duties has become commoditized, what advisors and their clients should expect and seek out is a personalized and responsive partner in trustee services.
Often, the relationship with an outsourced institutional trust company is more client-vendor oriented rather than a true partnership. Advisors need a trust partner that can add value throughout all phases of the client-advisor-trustee lifecycle. That partner will respect your role and be accountable to you and your clients.
Firestone Tire made famous the jingle, “where the rubber meets the road.” It’s the hands-on and “in the trenches” interactions with your trust partner that will make or break the experience for you and your clients. Advisors need to look beyond the standard trust company marketing “sizzle” of jurisdictional situs, state trust law advantages, and “advisor directed trusts.”
Ask yourself these questions when seeking a trust partner who not only is committed to a partnership service model, but can also deliver:
- How long has their trust company been around, and more importantly, how long have they been an “advisor friendly” trust provider?
- How much experience and expertise does their business development team have with the advisor-friendly model?
- Are you comfortable with them speaking directly to your clients and COIs?
- Do they assign a specific trust officer for your firm and accounts?
- How many trust accounts is each trust officer responsible for?
Answers to these questions will narrow the field. As you have choice in your custodial and technology solutions, so too do you in your preferred trust provider. In the same manner grantors can amend and change their living-revocable trusts, you have the option to replace any provider who isn’t meeting and exceeding your expectations.
A vast majority of advisors’ rate reputation and tenure as the most important qualities in selecting a trust provider. In contrast, the trustee fee is amongst the least important. Once selected, how trust providers perform “under the lights” after the dress rehearsal will help you decide whether to make them a long-term trusted partner and a key part of your solutions team. A good trust partner recognizes the importance of earning your business and confidence every day. And most importantly, they must strive to make your choice of recommending them to your clients look sensational.
Clients will continue to look to their financial advisors for institutional trustee recommendations that will allow their advisor to maintain a seat at the table should they become incapacitated or die. It is critical to ensure you’ve done thorough due diligence to get past the marketing “sizzle” and get to the “steak” that matters – serving you and your clients with professional, personalized and responsive service.
Mike Flinn is vice president and national sales manager for BOK Financial Advisor Trust Services. As a founding member of one of the original “advisor friendly” independent trust companies in 1991 and widely considered a “pioneer” in this rapidly expanding arena, Mike Flinn consults with advisors in the strategies and questions necessary to engage clients in the successor trustee dialogue. During his career, he has enabled advisors to capture and manage over $6 billion in new trust assets.
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