I'm Helen, I Possibly, Maybe Like My Job.......(5)

The 5th in the series of careers in the trust industry is the in-house Trust Counsel.

This is typically a role that exists outside of private practice though some law firms have a high-level, figurehead, Yoda/guru which is an equivalent of in-house trust specialist. The common thread is these are the people that rarely, if ever, see clients, never have billing or revenue responsibilities and are primarily responsible for being the intellectual vault and gate-keepers of risk. The job is often seen as refuge for those that can't or don't want to make partner of a law firm. In-house is usually a cushy job with stability, reasonable hours and good financial benefits.

There are typically 2 types of in-house roles: 1 for the trust business and 1 for the company as a whole. There's a big difference which I'll explain further down.

Counsel is almost always a lawyer/barrister/attorney/solicitor. Yes, need someone with a legal background. Not so good if you can't find a lawyer with a real trust background. Far too often, the person hiring the lawyer is not a lawyer themselves and many times, not even a trust person, so you end up with a lot of private client, tax, commercial or even sometimes family law or probate lawyers filling the role. Some do OK.....others are a running joke. Far too many people over-estimate the usefulness of a lawyer when it comes to trust work. Far too many non-trust lawyers over-estimate their knowledge about trusts. My advice: consider any lawyer a trust-moron until otherwise proven.

In-house counsel that are "for the company" may be part of the "legal department" and may not even sit with the trustees. There may be other company legal matters to attend to and the trust department is just one of your many "clients". They are a resource and how a resource is used or misused depends on the organisation. Some in-house are ignored as they less competent and cognizant of trust issues than your humble and lowly 4th year Trust Officer. Some are bypassed as much as possible as they may cost the trust business real money to use. Why pay for in-house when you can get the client to retain external counsel? In-house may sometimes just be a glorified messenger between the company and external counsel as who wants to really issue an opinion these days? Who wants to rely on an in-house opinion? Some are avoided as they are as business-friendly as a paranoid Compliance Officer with conspiracy issues. Other times, the in-house is as friendly and approachable as a pit bull terrier. Why work when you will still be paid just to sit? And if they were any lawyer worth their salt, you would end up with a reply (not an answer mind you) that had a lot of words but little meaning. In other words, you got a lot of "if's" "maybe's" and "perhaps" and "possibly's" which is fine liability management for external counsel but obviously a waste of time for those who truly need advice.

The main problem with a "company" in-house is that it is an adversarial system. It is you against everyone else. You are often a hurdle for those wanting to do business. When there's money involved, people like bankers and trustees will go as far as to collude and conspire against you to get the results they want, which is sign off on the business. If the Legal Department is strong then you will make a lot of enemies as you will turn down a lot of business as being too risky or dodgy. Most will fail to understand or appreciate the risk and unfairly label you impediment. You just cost them their Thai beach house or kid's college fund. If you are weak then you will capitulate and sign off on everything as a "business decision" rendering you a mere formality and no longer a gate-keeper which is what the company really needs. Supposed allies like the Compliance or Tax Department stick their heads in the sand and deflect everything back to you as a "legal matter". No one is willing to take responsibility for anything. You would be stupid to do so as it will come back to bite you.

For those that are "for the trust business": If you were sarcastic, then you could say that the existence of an in-house trust counsel pretty much means that the employer, be it a bank or trust company, doesn't know what it is doing. So you have an in-house because no else in the trust company knows the "right way" to set up and administer trusts. Be prepared to be bombarded with a lot of "you got to be kidding me" type questions from people who have no business being in the industry. Clearly that is not the case in all trust companies. The role may have been born out of necessity but sometimes regulations and other factors have literally forced some trustees, especially banks to keep "qualified lawyers" as part of the checks and balances of the overall governance of the business.

Now the main problem of being a trust business in-house is that you are there to validate what the business wants. You will need to sign off on that bearer share Cook Islands IBC with Red Cross trust beneficiary structure as it is what the business wants. If you won't then someone will be signing off on your termination papers. I know of cases where the in-house was instructed to find a way around a damning external opinion. Yes, please turn black into white or at least grey.
You are a court jester and if the King isn't amused then you could lose your head. You might just have to learn to hold your tongue and be subservient if the job means anything to you.

In-house of course is the first place people will look to when things go bad. What idiot proposed this way of doing things? Who drafted this unworkable procedure? Who signed off on the case the IRS is investigating? Who authorised the structure that was deemed a sham by the courts? Why weren't we informed of the risk? Who says we can't sell this or that anymore? Why hasn't UBS been able to hire multiple Wealth Management counsel roles in Singapore/Hong Kong for the past year? The trust business can be extremely complex and far-reaching so much so that there is always something you weren't aware off. If your in-house isn't up to snuff, then you will be burned sooner or later. Told you not to take responsibility for anything.

On the positive side, any in-house role could be a vital and highly important role that help establish policies and procedures, provide technical/research support, vet cases, set precedents, advise on risk, support audit and litigation and perhaps input on education and training. Overall, I would say that having a qualified in-house is great business decision and you should empower them to do their job and not let the business and politics drag them off course. You should recruit the best and not take in refugees.

Et tu, Brute?

STEP's Singapore branch has some interesting internal rumblings. [STEP is the Society of Trust and Estate Practitioners, of which most of the Singaporean branch members are engaged in the trust business]

Their recent AGM became a Mexican standoff and a comedy of errors. The ol' wise one of Singaporean tax, Gurbachan Singh was nominated to be Chapter President as well as incumbent President Angelo Venardos (he of OIL /Heritage Fiduciary fame). But Gurbachan's nomination came late and he subsequently withdrew his consent to nomination.

Alexander van der Zwaard (ex-Meespierson/Fortis-Intertrust) current Chapter VP was also late nominated for re-election and also had to withdraw his consent to nomination.

What ensued was a humbling and humiliating hour of exchanges, posturing, snide remarks, calls for resignations and rumbling by angry voters. I wonder if David Harvey [STEP CEO] was around to witness this as he was in town.

Probably amused the hell out of Brian Balleine (he may be the new kid in town from Rothchild Trust but is hardly wet behind the ears and a STEP Worldwide Expert Panel member) who was also on the ballot for a committee role.

All this for a non-paying job.

Lucas Lin, You're #1

The Strait Times report that Lucas, a now former Standard Chartered Bank financial consultant, became the first person to be prosecuted for violating Singapore's banking secrecy laws:
http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_535994.html

(I'm too lazy to boot up the Lexis, so I relay the info as is, but I recall there were other cases)

He was caught selling client details.

Lucas, Lucas, tsk tsk......should have approached the IRAS or IRS or ATO first....they pay better.

I'm Michael, I'm a 5 on the Grid (4)

Most trust businesses now distinctly separate the client-facing staff from others. Among the front-line are those that manage existing relationships and those that pitch to new prospects. This installment deals with the salesmen/ladies who are called anything from Business Development Managers to Trust Advisers to Wealth/Tax/Estate Planners to Fiduciary Specialists to Trust Sales or plainly Trust Officers. If there is any part of the trust industry that is "sexy", it is these rainmakers.

Obviously businesses want to put their best communicators and presentable people in front of the client. In an ideal world, your front line would also be among the best skilled, knowledgeable and technically proficient. What may not be so obvious is the impact that it has to the overall business model: you now have 2 distinct businesses. You now have people that have little or no idea what happens to trusts after they sell them, and you have people that have little or no idea how to plan or structure trusts as they only deal with after-sales processes. Training resources are usually skewed toward the front-line so your middle and back office gets dumber by the day. Can you promote your Head of Wealth Planning to run the trust business when they may have never had hands-on trust administration experience? Is your Head of Fiduciary capable of driving the business when they have had no sales or marketing responsibilities? The really big players don't have a problem running dual businesses as they have the resources/manpower to do so. Where this schism has a big impact on on the smaller trust players. They hire some Estate Planner from a big trustee and find out they can't manage a client end-to-end. Or they hire a Senior Trust Administrator and find out they have no idea how to bring in new business or capture market share.

When it comes to trust sales, it's pretty much a job whereby you need to identify or convince the client that they have a problem and establish that problem could be solved by a creating a trust. It could takes minutes or months. I would say that if you bought into a trust without weeks of deliberation and consideration then you're under-estimating the impact. If you allow a client to sign up in hours then you are a salesman, not an advisor. There are literally a hundred considerations that should be made. Whether or not most if not all were brought to your attention depends on the knowledge of the salesman and/or their agenda.

For those with a background in management or sales, you are probably familiar with some sales variation of the Blake & Mouton Grid. Google it if you don't know what I'm referring to. Your career as a front-line trust person can be encapsulated by a form the Grid. Where your employer wants you to be on the Grid and where your skills place you on the Grid tells you what your career will be like. The Grid is x-y chart that plots "caring about the Customer" on the y-axis and "caring about the sale" on the x-axis.

Those that place a high significance on the customer then to be either "people oriented" or "problem solvers". People Oriented salesmen tend to create special bonds with the customer and therefore conflicts when the product or service they are offering do not serve the customer well. A friend in deed, but in business, People Oriented salesmen have problems meeting revenue targets because they can't bring it upon themselves to close one-sided deals. People Oriented sales will work well in laid back, non-bureaucratic organisations. The Problem Solver is someone who cares greatly about solving the customers' woes as well as promoting product/services, as long as those services and products resolve the problems.

I make no judgments as to what is right or wrong or better or worse but it is very easy to identify the mismatches.

If you have a Problem Solver like a private client lawyer or tax specialist, these people will fair well in an organisation that allows them plan and devise often bespoke solutions. If you're running a holistic problem solving organisation, then you need people with problem solving skills. You can't plan a probate avoidance trust if you don't know the rules of probate. You can't advise on tax planning if you don't know taxes. On the flip side, these people get stifled in an über conservative trust company or one that has a limited or off-the-shelf offerings. When they don't have the tools or platform to solve problems, they fail or rapidly lose interest.

People Oriented salesmen are great for an organisation where there is time and resources to cultivate relationships. You will need to seek out those that those are not out for the kill. Perhaps your ideal salesmen may have even had a dismal scorecard at his previous employer as they measure themselves on the relationship, not the sale. There will be many lunch expenses and time-spent with no tangible results. If you're a People Oriented person then you will fail in the fast food-type, mass retail companies. You need to seek out more relationship-oriented employers like boutique private banks, family offices or small independent trustees or move up into the key client/UHNW space where. People Oriented salesmen are also most likely to breach controls and make self and company sacrifices in the name of the client.

Those with little concern for the customer tend to be "take-it-or-leave-it" salesmen or "product pushers". The TIOLI saleman is often low skilled simply because he can get away with it. These work well with big brand name institutions as the brand sells itself or with mass retail generic products as not much work is required from the salesman. Luxury goods sales are typical TIOLI people. Here's the Ferrari, TIOLI. As such, they are hit & miss when it comes to achieving targets. When your brand is strong and markets are booming, they look like superstars. When your brand sucks and the pipeline drying up, don't expect them to be proactive or consider it their problem. They are typically harmless and could probably be replaced with a software program or any warm body.

The Product Pushers are favorites of target-driven organisations. If you're under pressure to deliver 30 trusts or get AUM over $500M then you need these people who thrive on getting results. Of course, some of these results often come at the expense of something else like customer needs, due diligence and most things we like to think of as miss-selling. For every dollar a Product Pusher brings in, keep 10% in a war chest as you will be sued sooner or later. Product Pushers are often a little technically skilled as they need to be able to hit the right buttons, use the right sound bites, etc. Your typical PowerPoint professional. If you're not in a problem solving market, Product Pushers are fine, otherwise, they are usually in way over their heads. Product Pushers are usually fearless, energetic, boisterous and have the attention span of a fruit fly. They typically despise rules, formalities and post-sales activities. They off chasing another prospect before the ink on the last sales is even dry. Product Pushers have become the divas of the industry. They can command high salaries, get the perks and are often handled with kid gloves. If you upset them, they're off to your competitor along with their million dollar revenue stream.

Of course, there are more moderate middle grounds and where you or your organisation fit in the Grid is something you may want to look into. And in most team environments, junior staff tend to take on the characteristics of their team leader. If you have a Product Pusher as senior Trust Planning Manager then it's likely all his subordinates will become product pushers themselves. All the people he hires will likely be product pushers. If you're looking to hire, consider using the Grid to see where you're strong and where you're lacking.

Another One Bites the Dust

Commerzbank International Trust (Singapore) Ltd., CITS as it was known in these parts is no more. CITS was one of the early international banks to enter the Singapore trust industry. It's been home to a lot of people like Luke Peng, some may remember Jeff Halpern from the 90s,....

You knew something was up when Commerzbank basically dumped its SE Asian banking team in a deal with EFG. Pending MAS approval, the business is being sold to Trident Trust, which is now run in Singapore by former UBS (ahem, banking) big-wig Markus Grossmann.

All the best, Dudley