Skip to main content

Fiduciary Investment Management and Corporate Trustees

There are several factors to consider from an investment standpoint when selecting a corporate trustee.

Prudent investment management is one of the most critical, yet often overlooked, aspects of managing a trust and requires careful planning and proper execution.

 

One of the many benefits of appointing a corporate trustee is that they are held to a fiduciary standard of care when managing a trust investment portfolio, meaning they are legally obligated to put their client’s interests above their own when making investment decisions. While this may seem like common sense, this standard is not applied to all financial professionals.

 

Individual trustees are also held to the fiduciary standard of care, but they often are not equipped with the same level of professional investment expertise and resources that a corporate trustee would possess.

 

Factors to consider

There are several factors to consider from an investment standpoint when selecting a corporate trustee. Among them, a corporate trustee should take the time to conduct an in-depth analysis to fully understand the client’s short-term and long-term goals, their current situation and foreseeable liquidity needs, as well as risk tolerance. This information-gathering process will provide the necessary foundation upon which to build a prudent and diversified investment portfolio.

 

Investment selection and oversight

Determining the appropriate investment allocation is just the first step in the ongoing process of appropriately managing the investment portfolio. In addition to looking at how an investment has historically performed, there should be ongoing research and oversight to gather information and implement decisions based on the future economic outlook given current market conditions. The trustee should practice due diligence in implementing any new investments and continue oversight of existing investments, ensuring the objectives continue to be in line with that of the trust.

 

As we all know, life and circumstances are ever-changing. Developing a close relationship with the chosen trustee, and keeping the trustee informed of relevant occurrences, will help ensure the trust is able to support the beneficiaries in a time of need while still being able to accomplish long-term goals. The appointed trustee will work very closely with the client and beneficiaries over the life of the trust, so it is imperative to research a bank or trust company prior to finalizing this selection and feel comfortable with whom will be overseeing the relationship.

 

Trusts, after all, are all about your trust.

 

For more information about estate planning, download our free e-book, “Estate Planning: Why It’s Important and How to Get Started.” Or contact Cadence Trust & Asset Management at 214-365-7004 with your estate planning questions.

 

Lauren Mozur joined Cadence in 2017 as a Senior Trust Investment Analyst. She previously worked at a private wealth management firm, where she specialized in high-net-worth trust services, and at JP Morgan as a trade specialist. She earned both of her accounting and finance degrees from the University of Oklahoma.

 

This article is provided as a free service to you and is for general informational purposes only. Cadence Bank makes no representations or warranties as to the accuracy, completeness or timeliness of the content in the article. The article is not intended to provide legal, accounting or tax advice and should not be relied upon for such purposes.

 

Deposit products offered by Cadence Bank, N.A. Member FDIC

 

Investments and Insurance Products



Questions? We are here for you...

To ensure your safety, please do not include sensitive information in your submission.