A rather odd article (I guess by Sitaraman Shankar) from Reuters:
http://uk.reuters.com/article/idUSTRE64P4C820100526
The story is based around how "the Global rich want trusts, Swiss banks stay wary". It appears that the Swiss banks really want less to do with the "estimated $5-trillion global market" for it "could attract more unwelcome attention from foreign tax authorities".
WTF? Attract "more" attention? Little late don't you think? $2M threshold a problem? Are we talking private banking here or mass affluent?
While there are times when no business is better than bad business, I think this is a case where whoever is doing strategy at the Swiss banks concerned ought to be fired ( unless this is an exercise in disinformation and they are really gearing up their trust businesses). Have they stopped taking money from the same people? Is a trust any more inherently "dangerous" or "cancerous" to the institution than a bank account? Of course not....but if you've been accustomed to numbered accounts and "Red Cross" trusts, I guess you have problems adjusting to the brave (not-so-new) world.
Instead of finding a way to offer tax compliant/transparent structures and really performing due diligence and KYC and avoiding grey/dirty money, it appears they are taking the simple way out and saying no thanks. If you want honey, there will be bees, and bees can sting but there are plenty of beekeepers out there that know how to protect themselves and still get what they want. If it's bankable then it's trust-able. If it's not bankable then of course it's not trust-able.
But when push-comes-to-shove, bankers want assets under their management, not booked with some trustee. AUM that is under trust isn't exactly a selling point when negotiating with a prospective new employer. AUM under trusts screws up your revenue targets as trustees aren't as gullible and stay away from all those high profit funky geared/structured investments, accumulators and swaps. A true banker never puts their client in a trust, only true advisers do.
Obviously I'm biased and have vested interest in seeing Switzerland fall off the map as far as wealth management and trust services go. Just means more opportunities for the rest of us. So yes, pull out of the trust business, get out as fast as you can.
Thursday, May 27, 2010
Wednesday, May 26, 2010
I'm Rose, I Get Satisfaction From Long Lasting Relationships (3)
This part of my "careers" insight series looks at the Trust Administrator. Titles vary from Fiduciary Specialist, Relationship Manager, Trust Advisor, etc. but a rose by any other name would smell as sweet.
The job nature pretty much depends on what team you end up in more so than the organisation. I guess there was a time when 1 person did everything from planning the trust, to setting it up to administering the trust to terminating the trust. Now you see roles catering to the various phases of the trust life-cycle. There are trust people who do just the front end (sales, structuring, implementation - more on them later) and those who do only the middle (after sales, administration), and those who take care of the back end (decommissioning).
The bigger and more complex the trusts, the more likely sub-specialists appear. When you have more than 10 people in your trust team, that type of specialization makes sense for efficiency and an expert knowledge base. If you have enough UK clients then you have a UK team. If you have enough charitable trusts, have a charities team. If you have enough BVI trusts, then you have a BVI team. But if your too specialised, then you may find that your career is limited to those few trust companies that have the same structure. Not everyone has use for an one-trick pony. How many trust companies need a BVI trust specialist? 20 out of 50? How many require a full time charities trust manager? 10 out of 50? Narrow minded hiring managers and clueless recruitment agencies see only the handicap and not the potential.
Perhaps the most telling of what your job as Administrator will be like is the range of permissible assets your trustee accepts. At one extreme are single asset class trusts, like a life insurance trust. If you administer a life-insurance trust then there not a whole to do until the life assured dies. In theory you monitor the value of the insurance, perhaps collect interest/dividends if any, and wait. Banks tend to sell a lot of "portfolio" trusts where all you have are the banks investments and products of course a trading account. You're likely to be knee-deep in trading and making investments and playing with time-deposits and currency swaps, buying derivatives and other structured products. A glorified banking clerk, stock broker or investment advisor. It can be so transaction oriented that there will be times you forget that you are a trustee. At the other extreme you may be administering to yachts in the French Riviera or some plantation in the Philippines. Again, there is a tendency to silo people into specialised teams. Some teams do only insurance trusts. Other do tax avoidance trusts, etc.. Your experience may be limited to what your team does and not what the rest of the trust company does. That is why knowing the internal workings of your competitors is crucial when pinching or hiring. Some people just won't fit in your organisation because they were specialised or worked in specialised teams.
Since the trust industry can encompass all areas of life, you could be sending out congratulations cards on your newborn to attending funerals. You could be hiring prime-brokers to gardeners. You could be in the middle of a billion dollar deal or settling someone's dry cleaning tab. You could be counting bottles of wine or sipping it with a Fortune 500 CEO. You could be paying tuition for some orphan or laundering money for some shady businessman. You may become an extended member of someone's family or you could be one of the thousand faces that the client has seen.
You could be flying around the world or you could be stuck in some back office desk the rest of your career. You can be someone's saviour as well as someone's sworn enemy.
If you have any rapport with clients, then you may find yourself being drawn or pushed to the front-line. You will take on more sales, marketing and relationship handling roles than administrative ones. It used to be that Trust Managers that brought in new business or additional assets was icing on the cake. Now it's pretty much a part of your performance assessment...bring in $10M new AUM or you will get fired, despite your administration prowess. Generating revenue seems to be more important then client retention these days.
At a junior staff or Officer level, you are most likely just an extra pair of hands. Your job is primarily to get data (accounting info, banking info, passports copies, etc.) and data input to generate reports or documentation, lots of documentation. Of course, with lots of documentation there is a lot of clerical filing, photocopying, scanning, and storage. You job is really not to screw up. Scan for errors, no typos, no missing documentation, cross the Ts and dot the i's, don't over book meetings, get the right flight connections, get the good hotel bookings, etc.. You may also be involved with trust accounting and the CoSec work if those functions haven't been specialised also. Regardless of your title or seniority, you are nothing until you have an opinion that someone values. Until someone asks you what you think about this or that, you are glorified clerk.
It would be a mistake to believe that you will get much structured training. Most of what you will learn will come from your team leader and operation/procedure manuals (if your trust company even has them). If they are good teachers and have a solid background then you are lucky. Most team leaders are there because of their their skill set and not the training expertise. Very very few people have formal training in learning/training. Virtually no one in the Learning/Development teams of the world's biggest companies like UBS or Citibank have a clue as to what trustees do. Consequently, any education is a trustee department's internal matter. I know of trust companies that have weekly chat/tech/sharing sessions. I know of trustees that have never had any training what-so-ever. If you're senior enough then you may the opportunity to attend external seminars. Seniority is usually the prerequisite because external functions cost money. Your local STEP branch or Trustees' Association may run sessions for a few measly bucks, but some seminars cost US$1000-3000 (excluding travel or accommodation). Still these are usually "powerpoint" shows and hardly true education. You will find that most junior staff are under-trained and have poor foundations. You will find that many senior staff have only powerpoint/buzzword knowledge. If you take your career seriously, self-education is priority because no one else really cares.
As most trust administration teams are pyramid based (few seniors supported by many juniors), your career prospect is usually just upwards or out. Companies are generally not very supportive of horizontal moves, so if your stuck in the HNWI trust team, you may not get the chance to move to the UHNWI trust team. If your were hired for your specialist skills, say like a US tax background, then expect to be used that way and your perceived value is just that. People may never see you as a "well rounded" or "multi-talented". They just see you as the pigeon-holed US tax specialist and unless it has to do with the US taxes, you are not on the top of the list for other choice assignments.
Of course, how well your relationship with your superior/manager will largely determine your fate. You can work for one of the most prestigious companies in the world but that means nothing when your immediate boss is an arse. Look closely at the job your superior/manager has. Embrace it as it where you will be in a few years time or get out.
There are very few "true" trust companies, where trust and fiduciary services are the primary service. Banks are banks first and their trust companies, just a subsidiary. Others are company incorporation or tax planning or legal services firms first, trusts are merely complementary or ancillary businesses. Therefore, even if you were to make it to be Head of Trust, you may may still have to answer to someone else. You are the captain of a boat in a flotilla. I cannot think of a single trust person that has become a CEO of a bank or Tax & Trust partner being managing partner of a major law firm. A few trust people become MDs of those company incorporation firms. So keep your aspirations in check.
The job nature pretty much depends on what team you end up in more so than the organisation. I guess there was a time when 1 person did everything from planning the trust, to setting it up to administering the trust to terminating the trust. Now you see roles catering to the various phases of the trust life-cycle. There are trust people who do just the front end (sales, structuring, implementation - more on them later) and those who do only the middle (after sales, administration), and those who take care of the back end (decommissioning).
The bigger and more complex the trusts, the more likely sub-specialists appear. When you have more than 10 people in your trust team, that type of specialization makes sense for efficiency and an expert knowledge base. If you have enough UK clients then you have a UK team. If you have enough charitable trusts, have a charities team. If you have enough BVI trusts, then you have a BVI team. But if your too specialised, then you may find that your career is limited to those few trust companies that have the same structure. Not everyone has use for an one-trick pony. How many trust companies need a BVI trust specialist? 20 out of 50? How many require a full time charities trust manager? 10 out of 50? Narrow minded hiring managers and clueless recruitment agencies see only the handicap and not the potential.
Perhaps the most telling of what your job as Administrator will be like is the range of permissible assets your trustee accepts. At one extreme are single asset class trusts, like a life insurance trust. If you administer a life-insurance trust then there not a whole to do until the life assured dies. In theory you monitor the value of the insurance, perhaps collect interest/dividends if any, and wait. Banks tend to sell a lot of "portfolio" trusts where all you have are the banks investments and products of course a trading account. You're likely to be knee-deep in trading and making investments and playing with time-deposits and currency swaps, buying derivatives and other structured products. A glorified banking clerk, stock broker or investment advisor. It can be so transaction oriented that there will be times you forget that you are a trustee. At the other extreme you may be administering to yachts in the French Riviera or some plantation in the Philippines. Again, there is a tendency to silo people into specialised teams. Some teams do only insurance trusts. Other do tax avoidance trusts, etc.. Your experience may be limited to what your team does and not what the rest of the trust company does. That is why knowing the internal workings of your competitors is crucial when pinching or hiring. Some people just won't fit in your organisation because they were specialised or worked in specialised teams.
Since the trust industry can encompass all areas of life, you could be sending out congratulations cards on your newborn to attending funerals. You could be hiring prime-brokers to gardeners. You could be in the middle of a billion dollar deal or settling someone's dry cleaning tab. You could be counting bottles of wine or sipping it with a Fortune 500 CEO. You could be paying tuition for some orphan or laundering money for some shady businessman. You may become an extended member of someone's family or you could be one of the thousand faces that the client has seen.
You could be flying around the world or you could be stuck in some back office desk the rest of your career. You can be someone's saviour as well as someone's sworn enemy.
If you have any rapport with clients, then you may find yourself being drawn or pushed to the front-line. You will take on more sales, marketing and relationship handling roles than administrative ones. It used to be that Trust Managers that brought in new business or additional assets was icing on the cake. Now it's pretty much a part of your performance assessment...bring in $10M new AUM or you will get fired, despite your administration prowess. Generating revenue seems to be more important then client retention these days.
At a junior staff or Officer level, you are most likely just an extra pair of hands. Your job is primarily to get data (accounting info, banking info, passports copies, etc.) and data input to generate reports or documentation, lots of documentation. Of course, with lots of documentation there is a lot of clerical filing, photocopying, scanning, and storage. You job is really not to screw up. Scan for errors, no typos, no missing documentation, cross the Ts and dot the i's, don't over book meetings, get the right flight connections, get the good hotel bookings, etc.. You may also be involved with trust accounting and the CoSec work if those functions haven't been specialised also. Regardless of your title or seniority, you are nothing until you have an opinion that someone values. Until someone asks you what you think about this or that, you are glorified clerk.
It would be a mistake to believe that you will get much structured training. Most of what you will learn will come from your team leader and operation/procedure manuals (if your trust company even has them). If they are good teachers and have a solid background then you are lucky. Most team leaders are there because of their their skill set and not the training expertise. Very very few people have formal training in learning/training. Virtually no one in the Learning/Development teams of the world's biggest companies like UBS or Citibank have a clue as to what trustees do. Consequently, any education is a trustee department's internal matter. I know of trust companies that have weekly chat/tech/sharing sessions. I know of trustees that have never had any training what-so-ever. If you're senior enough then you may the opportunity to attend external seminars. Seniority is usually the prerequisite because external functions cost money. Your local STEP branch or Trustees' Association may run sessions for a few measly bucks, but some seminars cost US$1000-3000 (excluding travel or accommodation). Still these are usually "powerpoint" shows and hardly true education. You will find that most junior staff are under-trained and have poor foundations. You will find that many senior staff have only powerpoint/buzzword knowledge. If you take your career seriously, self-education is priority because no one else really cares.
As most trust administration teams are pyramid based (few seniors supported by many juniors), your career prospect is usually just upwards or out. Companies are generally not very supportive of horizontal moves, so if your stuck in the HNWI trust team, you may not get the chance to move to the UHNWI trust team. If your were hired for your specialist skills, say like a US tax background, then expect to be used that way and your perceived value is just that. People may never see you as a "well rounded" or "multi-talented". They just see you as the pigeon-holed US tax specialist and unless it has to do with the US taxes, you are not on the top of the list for other choice assignments.
Of course, how well your relationship with your superior/manager will largely determine your fate. You can work for one of the most prestigious companies in the world but that means nothing when your immediate boss is an arse. Look closely at the job your superior/manager has. Embrace it as it where you will be in a few years time or get out.
There are very few "true" trust companies, where trust and fiduciary services are the primary service. Banks are banks first and their trust companies, just a subsidiary. Others are company incorporation or tax planning or legal services firms first, trusts are merely complementary or ancillary businesses. Therefore, even if you were to make it to be Head of Trust, you may may still have to answer to someone else. You are the captain of a boat in a flotilla. I cannot think of a single trust person that has become a CEO of a bank or Tax & Trust partner being managing partner of a major law firm. A few trust people become MDs of those company incorporation firms. So keep your aspirations in check.
Thursday, May 20, 2010
I'm Jane, Company Minuting Is So Exciting (2)
The second in a series [1st: http://trustprofessioninasia.blogspot.com/2010/05/im-steve-i-love-my-job1.html] on careers in the trust business.
This installment I focus on your Company Secretarial team. And you thought this was a trust blog. Well it is and trustees and CoSec's have a inter-related even incestuous relationship. So much so, that many CoSec's work as trustees or for trustees or work hand-in-hand.
It used to be that trusts, more correctly, the trustees, used to legally own the trust assets. The trustee would open bank accounts in their own name, register property under their own name, etc.. But a variety of factors from liability, privacy, tax, regulations and commercial practicality makes that proposition almost an alien concept these days. Instead, many if not most trust assets are legally owned by one or more limited liability vehicles which is are turn owned the trust. This means your typical trustee now must have someone on the team that understands company or LLP incorporation and administration. So do you train trust people to be CoSec or do you take CoSec people and train them in trusts? Depending on your organisation, it could be a little of both, or the departments work independently or perhaps some of the work is sub-contracted out.
Asia has one of biggest pool of Caribbean corporate knowledge outside of the Caribbean. Many of the CoSec people here are as intimate with BVI BCs (formerly IBCs) and Cayman non-resident companies as anybody. I believe Harney's has calculated that close to 50% of BVI BC/IBCs are owned by Asians. Whereas, most local CoSec are trained in local Company Law and administration, your team needs to have international CoSec expertise. They may need to know about Jersey/Guernsey companies, various US LLCs, and any of the 20-30 popular jurisdictions people dream up uses for. So if you're a locally trained CoSec and you want to learn about the rest of the world, find a trust company or "offshore incorporations" firm.
In some organisations, the CoSec people actually do more the trust administration documentation work then the so-called trust team. The CoSec team incorporates the holding company, does all the statutory filings, pays all the annual licensing/registration fees, appoints all the officers, prepares the minutes to open bank accounts, acquire/transfer assets, fill out the bank account opening documentation, certify this, certify that, etc. All the trust team may do is prepare the Trustee's resolutions.
Unfortunately, CoSec people are usually treated as transactional animals. Do the paper concerning the required transaction and no more, no less. Do not expect anyone to explain to you why you need a Delaware LLC in this case, or why we have a Mauritius GBL 1 company in another instance. Unless they also prepare Trustee's minutes, they can have a long career without even touching the trust deed. Some places even put up Chinese walls so the CoSec team knows as little about the trust they are working on.
Why I said unfortunately, is that many CoSec have the tools and technical skills to become good trustees. Professional CoSec staff are licensed/accredited professionals, trained in Company Law, which is a lot closer to Trust Law than say Tax Law. They have (or should have) an understanding of fiduciary duties and operating intra vires. Their gospel is the Company's By-Laws/M&A, ours is the Trust Deed. The operate within the Companies Ordinance, we operate within the Trustee's Ordinance, or opt out when desirable. So if you're looking for your next trust officer, instead of hiring some half-wit from a rival, consider training up your CoSec team.
Of course some trust operations are run by former CoSecs. If they have been trained in trusts then they are probably pretty good. It's the ones that have been thrust into or Shanghai'd into trusts, without proper training or supervision that worry me.
At junior levels, the work is pretty mundane and essentially preparing and filing documentation. At senior levels, the work can be pretty important and even vital as there could be much at stake if you don't get the corporate under-belly of the trust structure right.
This installment I focus on your Company Secretarial team. And you thought this was a trust blog. Well it is and trustees and CoSec's have a inter-related even incestuous relationship. So much so, that many CoSec's work as trustees or for trustees or work hand-in-hand.
It used to be that trusts, more correctly, the trustees, used to legally own the trust assets. The trustee would open bank accounts in their own name, register property under their own name, etc.. But a variety of factors from liability, privacy, tax, regulations and commercial practicality makes that proposition almost an alien concept these days. Instead, many if not most trust assets are legally owned by one or more limited liability vehicles which is are turn owned the trust. This means your typical trustee now must have someone on the team that understands company or LLP incorporation and administration. So do you train trust people to be CoSec or do you take CoSec people and train them in trusts? Depending on your organisation, it could be a little of both, or the departments work independently or perhaps some of the work is sub-contracted out.
Asia has one of biggest pool of Caribbean corporate knowledge outside of the Caribbean. Many of the CoSec people here are as intimate with BVI BCs (formerly IBCs) and Cayman non-resident companies as anybody. I believe Harney's has calculated that close to 50% of BVI BC/IBCs are owned by Asians. Whereas, most local CoSec are trained in local Company Law and administration, your team needs to have international CoSec expertise. They may need to know about Jersey/Guernsey companies, various US LLCs, and any of the 20-30 popular jurisdictions people dream up uses for. So if you're a locally trained CoSec and you want to learn about the rest of the world, find a trust company or "offshore incorporations" firm.
In some organisations, the CoSec people actually do more the trust administration documentation work then the so-called trust team. The CoSec team incorporates the holding company, does all the statutory filings, pays all the annual licensing/registration fees, appoints all the officers, prepares the minutes to open bank accounts, acquire/transfer assets, fill out the bank account opening documentation, certify this, certify that, etc. All the trust team may do is prepare the Trustee's resolutions.
Unfortunately, CoSec people are usually treated as transactional animals. Do the paper concerning the required transaction and no more, no less. Do not expect anyone to explain to you why you need a Delaware LLC in this case, or why we have a Mauritius GBL 1 company in another instance. Unless they also prepare Trustee's minutes, they can have a long career without even touching the trust deed. Some places even put up Chinese walls so the CoSec team knows as little about the trust they are working on.
Why I said unfortunately, is that many CoSec have the tools and technical skills to become good trustees. Professional CoSec staff are licensed/accredited professionals, trained in Company Law, which is a lot closer to Trust Law than say Tax Law. They have (or should have) an understanding of fiduciary duties and operating intra vires. Their gospel is the Company's By-Laws/M&A, ours is the Trust Deed. The operate within the Companies Ordinance, we operate within the Trustee's Ordinance, or opt out when desirable. So if you're looking for your next trust officer, instead of hiring some half-wit from a rival, consider training up your CoSec team.
Of course some trust operations are run by former CoSecs. If they have been trained in trusts then they are probably pretty good. It's the ones that have been thrust into or Shanghai'd into trusts, without proper training or supervision that worry me.
At junior levels, the work is pretty mundane and essentially preparing and filing documentation. At senior levels, the work can be pretty important and even vital as there could be much at stake if you don't get the corporate under-belly of the trust structure right.
Tuesday, May 18, 2010
I'm Steve, I Love My Job....(1)
As an employee, you probably rarely visit your own company's website. But you should, it's highly entertaining or depressing. I particularly find "Careers" pages to be highly amusing. There is so much BS and "sugar coated" material there to make you want to barf for days. What we often see are "United Colors of Benetton" type layouts of a culturally diverse organisation of all genders, ages, races and religions, with many happy campers spewing out testimony of how great everything is and how the organisation has furthered their career or richly rewarded their contributions.
Since it's slow in the news department, I ambitiously embark on a multi-part series to tell you what it really like.
Let's start with the Trust Accounting team.
Unless you are an individual trustee, then you likely have an accounting team. There is probably 1-2 accountants for every Trust Manager.
It used to be that the accounting area was an unsightly mess. Stacks of paper, ledgers, receipts, invoices and statements strewn all over the place. The team took up more floor and cabinet space than everybody else. Everything used to be done manually and the clicking noise of calculators would drive you crazy. Every day, boxes of even more paper would be delivered. You needed to store boxes of documents offsite on a regular basis. Then they took up all the computers and hogged the printers, photocopiers and scanners.
Nowadays, you may not even know where your trust accounting team is! They may be at some low grade office space in another part of town or sitting in Guangzhou or Mumbai. You may not even have an accounting team....the work is outsourced to some service provider. Of course there are still some trustees that seem to forget that preparing accounts is one of their duties and dispense with this function all together.
And of course much of the work is automated or computerised and digitally scanned. We get live feeds from the asset managers/traders/brokers, daily feeds from the bank, etc. Valuations and exchange rates adjustments are computed automatically and you can get instant financial statement printouts that used to take months to do. As such, the function is more or less occupied by junior data-entry clerks. Due to the sheer volume of data, the accounting team still represents a large number of staff but still won't cost you as much as a senior Wealth Planner will.
Having a bookkeeping qualification is good. Being a professional accountant is nice but probably a little overkill unless they are the department head. There are probably only a handful of accounting treatment issues that pop up during the year that require a pro to handle. Still having a Chartered Accountant may not solve all your problems as most accountants have little if any training on trust/estate accounting and few if any understand the structure they are accounting for. So the good news is that you won't have to read or understand trust deeds to be a trust accountant. When's the last time you took your accounting people to a meeting with the client? Do you think they understand the potential implications of booking a loan to/from the trust? Have your accounting staff ever been allowed to go to STEP conferences or Trustee Association seminars? Only few even get to go to accounting seminars. Of course, even when they "blow it" and make an accounting error, who ever detects it? If a tree falls in a forest and no one is there to hear it.....
Occasionally, the client/settlor/beneficiaries may actually read the trust accounts you send them. Most often not, as it is historical information and if the trust is only holding a portfolio then the bank statement is a more useful and updated source of information the trust accounts. Some may have questions. They stupidly ask their
Trust Relationship Manager who is absolutely clueless because they have had nothing to do with the accounts. We now have several generations of trust administration people that have never prepared nor can they interpret trust accounts because it's not part of their job description. This disjoint in service delivery is a perhaps a little embarrassing but 90% of the time, it's harmless, just transfer the call to Rajesh in Mubai. The remaining 10% usually leads to the trust accounts and ledgers being Exhibit B in a litigation/tax investigation case.
There are pretty much 4 scenarios when the trust accounting department gets recognition: when they're late on delivery; when they screw up the accounts; when they lose data; or when their time costs exceed budget. As the trust accounting head, you will be constantly asked to make the accounts "prettier", more user-friendly, more colourful more charts. If you're a bank trustee, then you will be asked to choose some accounting policy to hide or defer investment losses and bank/trustee remunerations so as not to embarrass the private bank or arouse fee disputes. You need to promptly recognise any earned, realized or contingent investment gains/income. Trust capital can only increase and must never decrease. Create your own GAAP as required.
The work is usually stable and promotions static. Offhand, I can't think of any trust accountant making it beyond the accounting department so I think your career path is Head of the team or the streets. The good news is they're likely always hiring in Mubai.
Since it's slow in the news department, I ambitiously embark on a multi-part series to tell you what it really like.
Let's start with the Trust Accounting team.
Unless you are an individual trustee, then you likely have an accounting team. There is probably 1-2 accountants for every Trust Manager.
It used to be that the accounting area was an unsightly mess. Stacks of paper, ledgers, receipts, invoices and statements strewn all over the place. The team took up more floor and cabinet space than everybody else. Everything used to be done manually and the clicking noise of calculators would drive you crazy. Every day, boxes of even more paper would be delivered. You needed to store boxes of documents offsite on a regular basis. Then they took up all the computers and hogged the printers, photocopiers and scanners.
Nowadays, you may not even know where your trust accounting team is! They may be at some low grade office space in another part of town or sitting in Guangzhou or Mumbai. You may not even have an accounting team....the work is outsourced to some service provider. Of course there are still some trustees that seem to forget that preparing accounts is one of their duties and dispense with this function all together.
And of course much of the work is automated or computerised and digitally scanned. We get live feeds from the asset managers/traders/brokers, daily feeds from the bank, etc. Valuations and exchange rates adjustments are computed automatically and you can get instant financial statement printouts that used to take months to do. As such, the function is more or less occupied by junior data-entry clerks. Due to the sheer volume of data, the accounting team still represents a large number of staff but still won't cost you as much as a senior Wealth Planner will.
Having a bookkeeping qualification is good. Being a professional accountant is nice but probably a little overkill unless they are the department head. There are probably only a handful of accounting treatment issues that pop up during the year that require a pro to handle. Still having a Chartered Accountant may not solve all your problems as most accountants have little if any training on trust/estate accounting and few if any understand the structure they are accounting for. So the good news is that you won't have to read or understand trust deeds to be a trust accountant. When's the last time you took your accounting people to a meeting with the client? Do you think they understand the potential implications of booking a loan to/from the trust? Have your accounting staff ever been allowed to go to STEP conferences or Trustee Association seminars? Only few even get to go to accounting seminars. Of course, even when they "blow it" and make an accounting error, who ever detects it? If a tree falls in a forest and no one is there to hear it.....
Occasionally, the client/settlor/beneficiaries may actually read the trust accounts you send them. Most often not, as it is historical information and if the trust is only holding a portfolio then the bank statement is a more useful and updated source of information the trust accounts. Some may have questions. They stupidly ask their
Trust Relationship Manager who is absolutely clueless because they have had nothing to do with the accounts. We now have several generations of trust administration people that have never prepared nor can they interpret trust accounts because it's not part of their job description. This disjoint in service delivery is a perhaps a little embarrassing but 90% of the time, it's harmless, just transfer the call to Rajesh in Mubai. The remaining 10% usually leads to the trust accounts and ledgers being Exhibit B in a litigation/tax investigation case.
There are pretty much 4 scenarios when the trust accounting department gets recognition: when they're late on delivery; when they screw up the accounts; when they lose data; or when their time costs exceed budget. As the trust accounting head, you will be constantly asked to make the accounts "prettier", more user-friendly, more colourful more charts. If you're a bank trustee, then you will be asked to choose some accounting policy to hide or defer investment losses and bank/trustee remunerations so as not to embarrass the private bank or arouse fee disputes. You need to promptly recognise any earned, realized or contingent investment gains/income. Trust capital can only increase and must never decrease. Create your own GAAP as required.
The work is usually stable and promotions static. Offhand, I can't think of any trust accountant making it beyond the accounting department so I think your career path is Head of the team or the streets. The good news is they're likely always hiring in Mubai.
Saturday, May 15, 2010
A Star Is Born
A young man is making headlines in Hong Kong for his rousing debate/argument at local TV "meet-the-politicians-public-forum" show.
I once considered him for a trust job. I didn't give him a job. Looks like I did him a favour when he appears to be destined for greatness in politics.
Google the name 任亮憲 aka 馬草泥 or now the urban legend 維園阿哥.
Here's what his employer bio says:
Edward Yum
Graduated from University of Illinois (US), Edward has served many reputable financial institutions in Chicago and Hong Kong amongst others Harris Bank (subsidiary of Bank of Montreal), HSBC, Equity Trust, and Hang Seng Bank. Before joining Amicorp in February 2008, Edward assisted clients in establishing trusts of over US$300 million in AUM as well as providing accounting/administrative services to private funds with AUM of several hundreds of millions.
Edward is a licensed rep under the Securities and Futures Commission of Hong Kong (for Dealing and Advising), and has earned the TEP certificate, IIQE (life and health insurance), and qualification for being an FDIC trainer in the United States. Edward sits on the Education Committee of Hong Kong Venture Capital and Private Equity Association and is a member of AIMA.
I once considered him for a trust job. I didn't give him a job. Looks like I did him a favour when he appears to be destined for greatness in politics.
Google the name 任亮憲 aka 馬草泥 or now the urban legend 維園阿哥.
Here's what his employer bio says:
Edward Yum
Graduated from University of Illinois (US), Edward has served many reputable financial institutions in Chicago and Hong Kong amongst others Harris Bank (subsidiary of Bank of Montreal), HSBC, Equity Trust, and Hang Seng Bank. Before joining Amicorp in February 2008, Edward assisted clients in establishing trusts of over US$300 million in AUM as well as providing accounting/administrative services to private funds with AUM of several hundreds of millions.
Edward is a licensed rep under the Securities and Futures Commission of Hong Kong (for Dealing and Advising), and has earned the TEP certificate, IIQE (life and health insurance), and qualification for being an FDIC trainer in the United States. Edward sits on the Education Committee of Hong Kong Venture Capital and Private Equity Association and is a member of AIMA.
Thursday, May 13, 2010
We Can't Spell but We Can Advise You on Trusts
Do you bank with BOA-ML? Have they hit you up for a trust (and other ITWS products and services)? Before you sign on the dotted line, you may want to take a second opinion. Take a look at their recruitment ad for the Singapore office below.
They have a HR department that doesn't spell check. Wonder how many typos your trust documentation might have?
For an adviser on "estate planning and wealth structuring", "assisting in executing trust documentation", "providing training sessions", "knowledge of relevant legislation", etc............................
"legal training is not a must"!
Great! Admire them for breaking down the barriers to entry. Why let something like knowledge stand in the way of a successful career? I'm not saying you need to be a qualified lawyer, but if you're not trained in some area of law, be it Company Law or Revenue/Tax Law, Family Law, Securities Law, Insurance law or other financial reg's, then it's a crap-shoot as to whether you can competently advise on matters of law. After all, "estates" and "trusts" are animals that exist only in law. Then again, many qualified lawyers know shite about trusts.
The Ad: http://careers.bankofamerica.com/JobDetails.aspx?SearchPage=ASP&CountryId=199&JobId=SGP00800&stateid=&cityid=&travel=&jfamily=Wealth%20&%20Investment%20Management&lang=&fullpart=&shift=&datepost=&keywords=advisor&jobareas=&feedname=BOAFeedAsia&BOAFeedName=&jobfamilyid=-1&internationalcity=All%20cities&LocationID=18
Up to VP, Trust Advisor, Global Wealth Investmet Management
Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services.
Overview
Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company provides unmatched convenience in the United States , serving more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and award-winning online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009 , Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 150 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.
Responsibilities
· Advising international clients and prospects with regards to their estate planning and wealth structuring needs through the appropriate use of ITWS products and services - including travel to local country markets
· Marketing ITWS services to FA's and OMT maintaining strong communication with the field, including travel to branch offices to meet with the sales management teams and FAs
· Supporting the FA in the initial stages of the marketing of the trust services
· Assisting FAs and CSA/Os in executing trust documentation - liasing with the TAU in the IOM and/or Spore
· Keeping record of meetings and conversations with clients and prospects by prompt and thorough completion of contact reports
· Providing training sessions based on pre-established training modules for new CSA/Os and new hire FAs.
· Discussing amendments sought by existing trust clients with the FAs and the trust administration staff in the Isle of Man and/or Singapore
· Liaising with third party professional advisors (e.g. lawyer, property manager, accountant, etc.)
· Monitoring competitor activity in the market
Requirements
· 5 - 7 years of relevant working experience
· Possesses extensive industry knowledge
· Demonstrates integrity and teamwork
· Strong drive for results
· Client Focus
· Knowledge of relevant legislation and economics environments in the banking and securities industries
· Frontline experience in sales and marketing is essential
· Excellent linguistic and computer skills.
· Pleasant personality and good interpersonal skills
· Responsible, detailed oriented and self-motivated.
· Initiative and self-confident
· Strong organization and communication skills
· Ability to work under pressure and multi-task
· Excellent team player
· Entrepreneurial
· Hardworking
· Legal training is not a must
They have a HR department that doesn't spell check. Wonder how many typos your trust documentation might have?
For an adviser on "estate planning and wealth structuring", "assisting in executing trust documentation", "providing training sessions", "knowledge of relevant legislation", etc............................
"legal training is not a must"!
Great! Admire them for breaking down the barriers to entry. Why let something like knowledge stand in the way of a successful career? I'm not saying you need to be a qualified lawyer, but if you're not trained in some area of law, be it Company Law or Revenue/Tax Law, Family Law, Securities Law, Insurance law or other financial reg's, then it's a crap-shoot as to whether you can competently advise on matters of law. After all, "estates" and "trusts" are animals that exist only in law. Then again, many qualified lawyers know shite about trusts.
The Ad: http://careers.bankofamerica.com/JobDetails.aspx?SearchPage=ASP&CountryId=199&JobId=SGP00800&stateid=&cityid=&travel=&jfamily=Wealth%20&%20Investment%20Management&lang=&fullpart=&shift=&datepost=&keywords=advisor&jobareas=&feedname=BOAFeedAsia&BOAFeedName=&jobfamilyid=-1&internationalcity=All%20cities&LocationID=18
Up to VP, Trust Advisor, Global Wealth Investmet Management
Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services.
Overview
Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company provides unmatched convenience in the United States , serving more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and award-winning online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009 , Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 150 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.
Responsibilities
· Advising international clients and prospects with regards to their estate planning and wealth structuring needs through the appropriate use of ITWS products and services - including travel to local country markets
· Marketing ITWS services to FA's and OMT maintaining strong communication with the field, including travel to branch offices to meet with the sales management teams and FAs
· Supporting the FA in the initial stages of the marketing of the trust services
· Assisting FAs and CSA/Os in executing trust documentation - liasing with the TAU in the IOM and/or Spore
· Keeping record of meetings and conversations with clients and prospects by prompt and thorough completion of contact reports
· Providing training sessions based on pre-established training modules for new CSA/Os and new hire FAs.
· Discussing amendments sought by existing trust clients with the FAs and the trust administration staff in the Isle of Man and/or Singapore
· Liaising with third party professional advisors (e.g. lawyer, property manager, accountant, etc.)
· Monitoring competitor activity in the market
Requirements
· 5 - 7 years of relevant working experience
· Possesses extensive industry knowledge
· Demonstrates integrity and teamwork
· Strong drive for results
· Client Focus
· Knowledge of relevant legislation and economics environments in the banking and securities industries
· Frontline experience in sales and marketing is essential
· Excellent linguistic and computer skills.
· Pleasant personality and good interpersonal skills
· Responsible, detailed oriented and self-motivated.
· Initiative and self-confident
· Strong organization and communication skills
· Ability to work under pressure and multi-task
· Excellent team player
· Entrepreneurial
· Hardworking
· Legal training is not a must
Saturday, May 8, 2010
I PowerPoint, Therefore I Am
A twist on Descartes' "cogito ergo sum".
This Microsoft product has revolutionized the business world. I believe it is the number one presentation software. For all the good ppt and pps files have done (pretty, powerful, relatively fast, transmittable, savable, retrievable, etc) they are also the root of a competence crisis in Asia.
PowerPoint is perhaps the predominant choice of conveying information at seminars, meetings, proposal/sales pitches, training sessions and knowledge databases. Everything we know is pretty much on some ppt file. Everything about our organisations are on some pps file. CEOs use them at investor roadshows. BD people use them sell the products and services, etc.. Managers used them to justify their existence. Unfortunately, people are using them as Cliffs Notes (Most American students will have used one!) or "Trusts for Dummies" (the highly successful Wiley publishing series).
I just had staff member bring printout of several trust presentations (by external lawyers and trust companies) to a technical meeting and was flipping through them to "demonstrate" her trust knowledge and support her assertions. I guess I should be grateful that she is resourceful but now I worry about her debilitating technical ability. No more First Principles, no more statute, no more case law, no more years of study. Nope, we have the answer in some bullet point. The title sums up the book. A sound bite conveying the content of a speech. I would be surprised if this was not becoming prevalent in all "technical" professions.
All we know about the Cayman STAR trusts comes from a 4 slides from Maples. Everything I know about US Grantor trust rules comes from the diagrams ppt Baker gave me. All you need to know about Singapore reserved power trusts are perfectly explained in that Asiaciti pps.
Perhaps we should have an IT policy where we ban certain ppt/pps files like we prevent access to web-based email or chat rooms.
This Microsoft product has revolutionized the business world. I believe it is the number one presentation software. For all the good ppt and pps files have done (pretty, powerful, relatively fast, transmittable, savable, retrievable, etc) they are also the root of a competence crisis in Asia.
PowerPoint is perhaps the predominant choice of conveying information at seminars, meetings, proposal/sales pitches, training sessions and knowledge databases. Everything we know is pretty much on some ppt file. Everything about our organisations are on some pps file. CEOs use them at investor roadshows. BD people use them sell the products and services, etc.. Managers used them to justify their existence. Unfortunately, people are using them as Cliffs Notes (Most American students will have used one!) or "Trusts for Dummies" (the highly successful Wiley publishing series).
I just had staff member bring printout of several trust presentations (by external lawyers and trust companies) to a technical meeting and was flipping through them to "demonstrate" her trust knowledge and support her assertions. I guess I should be grateful that she is resourceful but now I worry about her debilitating technical ability. No more First Principles, no more statute, no more case law, no more years of study. Nope, we have the answer in some bullet point. The title sums up the book. A sound bite conveying the content of a speech. I would be surprised if this was not becoming prevalent in all "technical" professions.
All we know about the Cayman STAR trusts comes from a 4 slides from Maples. Everything I know about US Grantor trust rules comes from the diagrams ppt Baker gave me. All you need to know about Singapore reserved power trusts are perfectly explained in that Asiaciti pps.
Perhaps we should have an IT policy where we ban certain ppt/pps files like we prevent access to web-based email or chat rooms.
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