Directed Trusts

Competition among wealth managers for high-wealth clients is fierce. In order to attract and retain such clients, wealth managers must now offer a wide range of sophisticated services.

For years, two of these services — trust administration and investment management — came as a joint package. When a client came to a bank and was referred to its trust department, services were offered in the form of a trustee who would retain decisions about asset choice, arguing that both services were not wise to divide.

Now, as a wealth advisor, you can furnish the very powerful tool of a directed trust to allow your client to retain the services of an independent trustee and maintain full control over investment decisions and the management of client assets. Directed trusts have been around for nearly 20 years. As their popularity has increased since the creation of the Uniform Prudent Investor Act (UPIA), trustees are having a hard time justifying they still offer the best investment options for a client.

This report brings the directed trust concept to its most up-dated and evolved stage.