Ask anyone and the client service experience with a traditional corporate trustee ranks alongside any DMV office. It was not always this way. Prior to the bank consolidations beginning in the 1980s, corporate trustees, by and large, gave solid customer service. And then decisions slowly made in the C level suite began to affect us all.
Fast forward to today. The traditional corporate trustee struggles to adapt to the needs and wants of clients. Any trust company acting as the trustee has two main fiduciary responsibilities – invest trust assets and decide on trust distribution requests. Rather a simple business model except every decision is made at a fiduciary standard. Like any business there are client facing employees, trust officers, and back office employees. In general, the trust industry appears to struggle how to use technology for improved client service, risk management and net profit. As a fiduciary, any corporate trustee can be held liable for any and all investment decisions and trust distribution requests. Rightfully, a trust company wants to ensure all decisions are in the best interests of the beneficiary and following the rules/guidelines described in the governing trust document. Today, the trust industry still leans on paper and lots and lots of back office employees to check and double check fiduciary decisions. From a trust beneficiaries standpoint, all the extra time spent on making trust distribution decisions has not translated into exemplary client service and actions. From another angle, traditional corporate trustees have a hard time with innovation and collaboration.
A large part of a trustees fiduciary duties deal with reviewing, analyzing and approving trust distribution requests. Today, technology allows this process to happen very fast. Every trust document lays out the general guidelines of how a trustee should consider and approve a distribution. We all know about the standard language – Health, Education, Maintenance and Support. Health and Education decisions are relatively easy. Maintenance and Support decisions are tricky. The struggle for trust companies are to collect details about the distribution request, look at the trust file, understand the beneficiary’s situation and then make a decision that is correct and efficient. Over the last twenty years or so, independent trust companies have begun to make that trust distribution process more efficient. It is all about logistics. Really, the trust industry is all about risk management, client service and logistics. Any traditional or independent trust company that ignores that trifecta is already a dinosaur.
Trust distributions requests will eventually be approved digitally. That is a “When,” not an “If.” Today, in 30 seconds a trust client can request a distribution — online. It saves everyone around 40 minutes of manual work. After the trust client presses the online Submit button for the distribution request a logistical process begins. An email automatically is sent to the financial advisor on the trust account alerting them about their client’s trust distribution request. They can begin looking at the financial plan and cash availability. The trust officer receives an internal alert about the trust distribution request reviewing and analyzing the digital trust file. A collaborative call could occur between the advisor, trust client and trust officer as the decision dictates. Of course, all distribution decisions require a verbal confirmation with the trust client. The trust industry has entered the digital age giving clients better and faster service
