America's Most Advisor-Friendly Trust Companies 2024 - 18

2024 AMERICA'S MOST ADVISOR-FRIENDLY TRUST COMPANIES
When interviewing a potential partner,
find out about the marketing support.
It's not necessarily a deal breaker,
but the more the trust company can
help you establish your role as a trust
advisor, the faster this relationship will
pay off for you both. For any advisorfriendly
trust company, business for
you is good for them.
WHAT WILL IT COST?
Naturally, corporate trustees need
to charge for their services. While
regulators are pushing for greater
transparency here, this fee is often allinclusive
or bundled in such a way that
beneficiaries and their advisors have
a hard time determining where the
money goes.
Traditional all-in-one trust companies
further obscure the cash flows by
charging a fee that compensates them
for their investment management
services, fiduciary risk and other " soft,
non-value-added services " provided to
clients.
Directed trusts, on the other hand,
generally separate the investment
advisory fee from the corporate trustee
fee. As a result, clients receive much
clearer insight into what they are
paying-and often a lower total fee as
well.
In general, fee schedules for directed
trust companies fall in a range from
0.50% to 0.75% on the first $1 million,
and then drop according to varying
breakpoints thereafter. Minimum
annual fees range from $4,000
regardless of asset level, although
some types of trust start in the $1,500
range. A few vendors will charge a
flat fee for any amount of assets.
Additional fees may apply for real
estate held in trust, estate settlement
and termination fees, tax preparation
and/or filing, or miscellaneous
extraordinary services.
Note: The IRS has ruled that all
corporate trustees are required to
separately account for investment and
administration fees. This is intended
to remove the tax advantage of a
" unitary " trust in which the entire
trustee fee can be deducted, as
opposed to a trust that charges
separate fees and allows only partial
deductibility of fees. Directed trusts
already break out the fees in this way,
but because this is a relatively new
development, it gives you a good
" talking point " in your negotiations with
trust companies.
TECHNOLOGY THAT SETS
YOU APART
The right accounting platform can
interface with modern state-of-theart
portfolio management tools that
directed and delegated advisors use
today, while also incorporating your
best tax optimization and rebalancing
strategies. The investment architecture
can now be truly open, working with
any third-party or in-house alternative
assets your platform supports.
Integrated multi-custodian data feeds
allow the administrators of large trusts
to track thousands of open investment
positions, report market values and
attribute performance with a minimum
of delay and errors. This functionality,
in turn, is what makes the very
existence of smaller trusts possible.
A modern trust administrator may be
able to share data with your customer
relationship management system and
provide other integration benefits. If
this kind of efficiency matters to you,
it's important to ask a potential partner
whether you can get it.
But the primary advantage technology
is bringing to the trust business is the
elimination of paper. Moving the forms
into secure paperless environments
has been essential for a new
generation of trust officers who can
now give beneficiaries, grantors and
investment advisors alike access to all
necessary documents.
Forms can be sent out for fast
electronic signature and then stored
electronically as well for instant
access. The faster the signature fields
are populated, the faster distributions
and other complex processes can
move.
It's important to remember that the
next generation of heirs grew up with
the internet and uses technology
to receive and review every type of
document. It's how they communicate.
When it comes to communicating
to your clients' heirs, having
straightforward technology that you
can easily operate is essential.
18
America's Most Advisor-Friendly Trust Companies 2024

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