Lawyers, accountants and financial advisors often have unique relationships with their clients and may be suitable to serve as trustees of a trust, since they must understand you and your estate almost as well as you do. This case illustrates the conflict that can easily develop when employing a trustee with certain professional skills to provide services to the trust. A trustee should seek the most qualified expert considering, among other things, the complexity of the matter and the size of the trust. However, an accountant, lawyer, or financial advisor may want to work for the trust and may be paid for your professional services.
Before taking on a dual role, ask yourself if you handle the proposed matter in the most efficient and cost-effective manner in your professional capacity or if there is another professional better suited for the task. For example, Wealth Advisors Trust Company does not do this because it does not reduce the risk of the Financial Advisor and increases the workload. The benefits to the advisor occur when they are named in the document and then remain a legacy advisor. They will require separate trust custody accounts for distributions, but not all advisor-friendly trust companies are like that.
If you have a client who has chosen a traditional trust company, understand that you, as an advisor, will be replaced by investment management services. In addition, some firms prohibit their financial advisors from performing these functions, so I tell clients to consult with their financial advisor to determine if possible. If an investment advisor or their related persons act as trustee, executor of an estate, or curator, that will cause the investment advisor to have custody. Cetera's firm policies prohibited brokers and investment advisors from being appointed trustees, co-trustees, trustees, successors or executors of a client of the firm, or having a power of attorney for a client of the firm or beneficiary in any capacity, unless the client was also a family member.
immediate. Some trust companies eliminate the risk of their financial advisors by having advisors use their model portfolios or their custodians. A major risk factor for financial advisors is who has chosen their client to act as trustee. Advisors will often be asked to manage a client's trust assets or to assist in the estate planning process.
Lawyers, accountants and financial advisors often have a special and trusting relationship with their clients. It is important to understand if that advisor will continue to be present when it is necessary to manage trust assets. The trustee delegates the advisor to be the investment manager, but the trustee can delegate to another person if the advisor makes a change. Whether your client uses a directed trust or a delegated trust, it's important to understand the risks for the financial advisor.
Because brokers and financial advisors can have a close relationship with their clients, the possibility of undue influence from a client is a concern. The question of informing a financial advisor of your risk with a directed trust is not usually asked in the trust industry.