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Trust Providers Broaden Adviser-Based Services


Mutual fund and other financial services firms are making it easier for their investment advisers to address a broader array of clients' trust needs, ranging from estate planning to philanthropic giving.

Pershing LLC, a Jersey City unit of Bank of New York Mellon Financial Corp., is now giving its investment advisers and broker/dealers access to a variety of investment services provided by four trust administration companies.

Other large financial services companies, including Wachovia Corp. and Fidelity Investments, have started similar offerings in recent years.

"So many households now need trusts," said John Feldman, sales director at Ameritas Life Insurance Corp. of Lincoln, Neb., which started using Pershing's services in recent months.

Sometime, Ameritas' 17,000 registered representatives' high-net-worth customers want to create trusts for purposes ranging from reducing estate taxes to earmarking wealth for charity.

Individuals who use the services pay prices that range from 0.15% of their assets (for accounts larger than $10 million) to 0.75%, depending on factors like account size and providers involved. Clients also receive services from experts such as lawyers and accountants.

Thomas R. Livergood, chief executive officer of the Wheaton, Ill., consulting firm Family Wealth Alliance LLC, said "there's big potential" demand for this type of service.

"It makes sense to have an independent trustee that's not conflicted with appointing itself as an investment adviser," he said.

The trust business is expanding quickly. According to a report the California consulting firm Tiburon Strategic Advisors released in June 2005, there were nearly four million personal trusts in the United States, more than twice the number eight years earlier. These accounts collectively had $3.3 trillion of assets.

The number of trusts continues to grow as the aging Baby Boomers increasingly need such services to manage their wealth, and it's not just the super-affluent who seek trust services.

"Firms are trying to get in front of this," said Shadia Kirk, vice president and product manager in Pershing's product management and development group. "It's a big wave."

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