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Choosing a potential service provider to act as trustee (Certain…
Choosing a potential service provider to act as trustee
It is the settlor who chooses the first trustee when settling an express trust.
Depends on
The aims of the settlor
The resources available to the settlor
The settlor's client service expectations
A potential settlor may wish for the trustee to be provided by an entirely independent trust service provider, therefore may bank-owned service providers or those who offer their own portfolio management services
Other potential settlor may prefer to keep their business confined to connected organisations - such as with their existing bankers.
It is common for banks to own trust companies to be able to keep the provision of bank accounts, a trustee, portfolio managers and other advisers in-house
The lack of independence may mean that the bank-owned company is unlikely to choose external parties to provide services to the trust, even if they may offer better rates of interest etc
It can be argued that the ability to provide services in-house outweighs the benefit of having independence, as it may secure lower fees for the client, create operational efficiencies and enables the bank to know and understand all aspects of the client's business, thus creating opportunities for the client and the bank
Trustee services may be provided by accountancy firms, banks, bank-owned trust companies, law firm-owned trust companies or independently owned trust companies
These range in size fro very small to very large organisations
A potential settlor with complicated structures spanning across jurisdictions may wish for their trustee to be a law firm with a presence in several jurisdictions
A potential settlor whose main aim is to provide for their family after their death may choose a 'family office' or small provider with whom they may build up a close relationship
Certain characteristics that many potential settlor will desire from their trustee:
Should be regulated and supervised
Should be qualified and experiences at providing the services for which they are employed
The size of the organisation should be suitable for the client in that it should such that they feel that their business is important to the organisation
Some clients enjoy the security that being connected with a large institution may afford them
Some clients may prefer to be looked after by a small company where the staff know their business and where they receive a personal service
The fees and charges levied by the provider should be reasonable and transparent
Should be a reputable person and there should be a lack of adverse publicity and a good regulatory track record. A service provider's reputation is key to its ability to attract and retain good quality client and intermediary contacts
Good level of customer service
Availability of talented and experienced professional staff, particularly those with experience of dealing with the jurisdiction or activity with which the client is connected, is desirable
Clients favour consistency and the ability to lease with the same members of staff over time. High levels of staff turnover are undesirable