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The Golden Questions™ to Ask as a Financial Advisor to Clients with a Trust

Identifying clients already in your book of business that have or need a trust advisor is a great way for financial advisors to expand and cement hard earned relationships. Understanding how trusts influence decisions your client’s families make and how they can transform a good financial advisor into a family friend and confidant.  Many advisors are surprised when they find that some of the families they serve have a trust and want to leave a bad trustee relationship but don’t know how.  

Understanding clients’ involvement with a trust can sound technical and overwhelming. Because of this, many advisors never even approach the topic of trusts with clients.  Sadly, not being involved in the trust portion of your client’s estate can open you up to the possibility that your hard-earned client relationships leave to go where their family’s trust is currently invested.  

Typically a too big to fail bank or even the individual currently serving as trustee can exert great influence over your clients to move their investments away from you.  To compound the issue, estate planning attorneys often write in their preferred trustee / investment manager into trust documents they draft.  Advisors who don’t understand these fundamental risks to their business can see decades-long relationships abruptly ended when a death occurs and an estate plan goes into effect.  By starting a conversation about the benefits of a trust and an independent trustee, you protect your role as asset manager.

But how do we start these important and sometimes sensitive conversations? 

For over ten years, Independent Trust Company’s only method of prospecting for new business is by helping financial advisors identify and capitalize on trust opportunities that currently exist in their book of business. By using ITC as a trust advisor resource, financial advisors can start learning to ask The Golden Questions™to identify and effectively grow new AUM. These questions open the door for advisors to start the trust conversation to win ‘sticky’, sustainable business and can be asked during client discussions around annual reviews or even just calls to check in when a portfolio makes a big move.

Trusted financial advisors usually know about life events like the death of a relative, sale of a business, retirement, and the birth or marriage of a child to only name a few.  These events present opportunities to start the discussion about your client and their family’s potential involvement with trusts.  You’ll often find that clients can be frustrated with their current trustee relationship for any number of reasons – even unrelated to investment performance – and are grateful to get you involved in identifying a trust solution. Below we share the Golden Questions™ to ask as a financial advisor. Browse our website for even more financial advisor resources and contact us if you have any questions!

Important Questions to Ask your Clients as a Financial Advisor

Golden Questions for Financial Advisors:

  1. Are you or your family involved in a trust in any way?
  2. If so, are you happy with your trustee?

If the answer is no, now you know that an opportunity exists for you to advise on getting a trust set up for assets currently in your book.  Alternatively, you may find that clients respond with something like, “Well, no but my wife’s family has a trust, and they are considering a move.”  In either scenario the opportunity to strengthen a connection presents itself.  For clients in need of an estate plan, contact us to discuss how to put yourself in the best possible position.  For clients with family that is involved with a trust, the next questions are something like:

  • Is the trustee an individual or bank?
  • Do you / they feel like their trustee understands the family’s unique needs?
  • Do you feel that your trust’s investments are performing well?
  • Are your distributions, statements and tax return timely?
  • Does your trustee take the time to help you understand your role and entitlements under the trust document. 
  • Has your trustee communicated what the intent of those who established the trust was for affecting your life?
  • Do you feel that the long-term goals for the trust are being realized?
  • If I could show you a way for us to more effectively administer and invest your trust’s assets, would you be interested?

These are simply suggestions but the purpose of these questions is to help you begin a discussion that expands and strengthens the relationship with your clients.  They can feel more understood and even more open to share concerns they have about their future, their current Trustee and potential effects on their family. When asking The Golden Questions™, keep in mind that your goal is to understand the impact of the trust’s influence on the family and ways you can be a support and add value. 

When serving as trustee, Independent Trust Company takes the fiduciary responsibility for all the technical aspects of trust administration.  Advisors who qualify continue to add value when they are appointed as ITC’s agent and accept delegation for day-to-day management of the trust’s investments according to the parameters set by our Trust Committee.  ITC partners with financial advisors to serve as a reliable source for their trust families by offering personal, understandable trust solutions that put the interests of the trust first. These interactions can serve to strengthen relationships with the families who trust you.  It can show that you have their best interests at heart and can set you up to grow or retain your book of business.

If you happen to find that your client has already drafted an estate plan, there is one last Golden Question™ for you to ask:

Who did your attorney appoint as trustee and executor or personal representative for your trust and estate settlement?

Many attorneys name the local bank or a family relative as trustee and executor or personal representative (PR) for the estate.

Unfortunately, when a local bank takes over as Trustee, the Financial Advisor who has worked with a family for years to build the family’s wealth is most often pushed aside so that the bank can invest the assets. This means that a relationship you have spent years building is gone because you didn’t ask The Golden Question™ to defend your hard-earned client relationship.  Independent Trust Is here for you, please don’t hesitate to contact us to help when you find yourself talking about trust services with your clients. We provide complimentary reviews of estate plans, trust documents and their accompanying asset statements.  At the conclusion of our review we will work with you to answer questions or even develop a plan of action.   

Understanding your Clients Needs as a Financial Advisor

Sometimes you may find that an individual family member or advisor is asked to serve as a trustee.  Some estimate that individuals act as trustees for up to 80% of all the trusts out there.  Individuals are typically chosen because the people who name them feel that they understand the family’s dynamics and culture and they want that understanding to have weight in making decisions. 

Unfortunately, most individuals don’t understand the technical requirements of settling an estate, the associated tax ramifications or keeping and maintaining proper documentation of accounts and actions taken. This often sets most individuals – even highly sophisticated professional advisors like CPA’s and attorneys – up for failure.  Poor record keeping, and distribution documentation opens the door for family disputes simply because the person appointed did not have the necessary understanding and tools to do the work of the Trustee or executor.You and your clients have worked for decades to build wealth to pass on.  Caring enough about your clients to ask The Golden Questions™ expands your relationship of trust and can prevent unintended consequences for families. It also helps preserve your relationship with your client’s family members.

The Golden Questions™ can help your clients see the value in involving you with their trust.  Ask for a copy of the family’s trust document and most recent trust asset statement – ITC will review and create a plan of action free of charge. Understanding how to identify and begin a conversation with clients in need of support with trusts and / or estates is a critical component of long-term client retention. Knowing how to start that conversation not only creates a better experience for your client today, but can also keep the assets under your management long into the future. 

The ability to have meaningful discussions around trust and estates are the only real long term solution for advisors that want to build legacy value in their practice. Independent Trust Company is the solution in trust advisor services. Browse our website for financial advisor resources, family trustee services and resources, or contact us to and speak to an Independent Trust Company representative to learn more.