Trustee

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Jan 2, 2010 2:30 pm

Has anyone heard of a wirehouse FA acting as a trustee for a clients trust?  I can't imagine that it's possible but i thought I'd ask here so I'll know the answer from compliance before i ask.

 
The gist....I manage a portfolio for a couple with 3 kids.  If someone walks in front of a train, a relative cares for the kids but they want a non-family member directing the funds until everyone reaches a certain age - they'd like me to be that someone.
Jan 2, 2010 4:35 pm

You are looking for a corporate trustee which many banks and wirehouses offer.  Not a great situation to be honest and its expensive to the client.

Jan 3, 2010 10:23 am

If you work at a reputable firm, they won't allow you to do it.  You can always have the firm act as a corporate trustee - but that gets expensive as well (as previously mentioned).

Jan 3, 2010 12:03 pm

Maybe a co-trustee with a local CPA?

Jan 3, 2010 12:04 pm

No.

Jan 4, 2010 11:20 pm

Nova, unfortuately, the answer in all likelihood will be no.  I know that LPL's compliance says absolutely no and I can't think of any B/Ds that would allow it.  If you were in a bank setting, there would be the possibility of the bank being named as trustee with you being the primary bank representative for the account, heavily involved in all aspects of managing the relationship (I did this at the bank).  You would not be named trustee personally, but the result, so long as you were at the bank and the bank agreed to allow you to take lead, would be for all intents and purposes the same.  frankly, even if you could, I'm not sure you would really want to do that.  It's a lot of responsibility and can take up a lot of your time.  You essentially become a surrogate parent, telling the kids yes & no on financial matters.  When kids realize that you control the purse strings, they can effectively wear you out with a lot of requests for funds.  I've been there...it can suck a lot of time out of your day.  It's noble to want to help out, but you're better off helping them find someone you can work well with so you can focus on managing the investments and letting sonmeone else deal with all the BS requests for $$$.

Jan 5, 2010 9:43 pm
Absolutely amazing that this post is here. I'm in the midst of a similar situation.
 
How would this work:
Existing client is the current trustee of his trust. The successor trustee is his bank who has a wealth mgmt division. Is it safe to assume that if he is ever not in a condition to admister the trust that this account will be acat'd immediately to that bank? Its one of the larger banks by the way.
 
We are strongly considering replacing the successor trustee with a nephew of the client or CPA. I get the impression the CPA doesn't want to step up as Successor Trustee so maybe the nephew is the only hope. If he doens't want it then its the banks deal...
Jan 6, 2010 8:31 am
bluewire:
Absolutely amazing that this post is here. I'm in the midst of a similar situation.
 
How would this work:
Existing client is the current trustee of his trust. The successor trustee is his bank who has a wealth mgmt division. Is it safe to assume that if he is ever not in a condition to admister the trust that this account will be acat'd immediately to that bank? Its one of the larger banks by the way.
 
We are strongly considering replacing the successor trustee with a nephew of the client or CPA. I get the impression the CPA doesn't want to step up as Successor Trustee so maybe the nephew is the only hope. If he doens't want it then its the banks deal...
 
 
Probably not an ideal choice for you, but as an example of what is out there:  Franklin Templeton has a program where they act as trustee for a client, and the FA keeps control of the investment management.  This came from a need of a similar situation happening all over the country: Client needed trust services FA couldn't provide, client went to bank for such services, bank takes over investment management as well.  I'm sure there are strings attached (like getting stuck with FT investments), but I'm sure there are similar set ups out there - or just find a small reputable bank that will serve as trustee and not touch the investments.