Conshohocken, PA -- (SBWIRE) -- 04/01/2015 -- Everybody benefits when a partnership is created between a financial advisor who doesn't administer trusts and an independent corporate trustee who doesn't manage money. When this is married with an independent custodian it provides a client with a completely segregated solution that can virtually guarantee that situations similar to the Madoff case will never happen with their clients' trust assets. As a respected trust administration firm that provides management services throughout the United States and globally, Sterling Trustees strives to be the optimum model for independence.
Unfortunately, most other US firms do not display a comparable commitment to doing business in such a safe and logical way. And identifying the handful of corporate trustees that are genuinely independent can be challenging. While Sterling Trustees strongly believes in the independent structure and will carefully serve each grantor and beneficiary objectively, they realize that this is not always the industry norm.
According to Robert Testa, who provides quantitative analysis for The Cerulli Report series, "Corporate ownership can be really complicated because trust companies often have different holding companies, and majority/minority ownership is not easily defined." Further complicating matters, statistics are reported on individual entities, without heed to the over-arching ownership, and companies can be either federally or state-chartered. Therefore, it is sometimes difficult to determine the regulatory structure of a company or whether it is managing trust assets or just has them in custody.
Another downfall of trust companies that manage assets internally, instead of operating independently, is that they try to function as a "one-stop-shop" provider of integrated services. Attempting to streamline operations usually leads to an inevitable conflict of interest and puts the provider at a dangerous crossroads.
Testa continues by warning, "if the trust company is using all in-house products, alarm bells should go off." He cautions that managing all assets internally can affect a trust company's independence, and may lead to less rigorous due diligence when making decisions about integrating products into a portfolio, as well as the timeframes for removing them. In the end, Testa advises, the investments should perform well, be diversified and should meet the standards that other funds do, in order to defend the use of all in-house products.
All trust companies must ask themselves whether they will move assets into better-performing funds to protect the beneficiaries' interests, or if they will allow the bank's bottom line to rule the day. The principals at Sterling Trustees already know the answer to that question and strive to use their independence to their clients' advantage every time.
For more information, please contact Sterling Trustees directly at their office. Their South Dakota office can be reached by phone at 605-593-8950 or by e-mail at info@sterlingtrustees.com
About Sterling Trustees
Sterling Trustees is a fee-only trust administration firm located in Sioux Falls, South Dakota. By working independently, the firm allows its clients to avoid the extra costs and conflicts of interest associated with large financial institutions. Sterling Trustees' main goal is to keep assets safe while remaining objective.
For more information, please visit http://www.sterlingtrustees.com