SOURCE: Spectrem Group

Spectrem Group

September 21, 2016 12:19 ET

New Spectrem Report Shows the Number of Personal Trust Accounts Managed by Financial Institutions Continues to Decline Despite Record Numbers of Wealthy U.S. Households; Unique Spectrem Report Allows Investors to Explain Their Trustee Decisions

CHICAGO, IL--(Marketwired - September 21, 2016) - Despite record numbers of wealthy U.S. households in 2015, the number of personal investment trust accounts declined for the seventh consecutive year, according to Spectrem Group's newly released 2016 Personal Trust Update. As wealthy families seek to maintain control over their trust assets, they are increasingly eschewing traditional trust companies.

At the same time, Spectrem's qualitative report Choosing a Trustee includes interviews with investors who made the decision to self-trustee rather than use an institutional professional, as well as interviews with investors who handed their trust over to a bank.

The 2016 Personal Trust Update shows the number of Managed Personal Trust accounts declined in 2015 to 541,246, while the number of Non-Managed Personal Trust accounts decreased slightly, reflecting a trend among wealthy investors to act as self-trustee and utilize non-banks as the custodian. In Choosing a Trustee, the most common reasons cited by wealthy investors to self-trustee rather than utilize a corporate trustee was the perceived high staff turnover at banks, and concerns that an institutional trustee would not understand the family finances properly.

Other key findings in the 2016 Personal Trust Update include:

  • Nearly 60 percent of all personal trust assets are controlled by the top 10 holding companies, and three quarters (75 percent) are held by the top 25 institutions. Bank of America is the largest firm, with more than $100 billion in trust assets.
  • Eighty-five percent of millionaires believe their financial advisor is a Fiduciary, but only 65 percent believe that that an advisor looking out for their best interest is included in the relationship.

"The decision to create a personal trust is, by definition, a personal one based on trust; investors worry about whether they can trust an institutional trustee to provide the personal attention they desire," said Spectrem Group president George H. Walper Jr. "Trust companies need to project stability and highlight their unique skills in handling trust funds to combat the decline in corporate trust accounts that has been ongoing since the recession. Corporate trustees must promote their status as a fiduciary, especially in today's market, where the fiduciary role is considered so critical."

About Spectrem Group: Spectrem Group (www.spectrem.com) strategically analyzes its ongoing primary research with investors to assist financial providers and advisors in understanding the Voice of the Investor.

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