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A Tale of Two Trust Companies:
Exploring how to design the efficient, profitable and client-centric trust company
Introduction
Trust companies should explore how
to constantly improve client service
and maximize profitability through
best practices in trust technology,
connectivity and workflow. Trust
companies must ask themselves if
they are leading the way, effectively
deploy appropriate capabilities in
and as a result, their profitability may
the ultra-competitive world of wealth
suffer. Other firms utilize leading
management.
capabilities in technology, connectivity
and workflow to automate processes
Trust companies’ efficiency levels
and create a more customer-centric
may vary considerably. Some trust
offering, which can result in increased
companies use relatively more
profitability. Table 2, based on data
operations staff, investment officers
gathered from a variety of small
and administrators than their peers,
to medium-size trust companies,
adopting and leveraging innovative
solutions, or are they an industry
laggard, doing business the same way
It was the best of times; it was the worst of times…
it has been done for decades? This
Tellson Bank and Darnay Trust, located on opposite sides of Main Street
in a large Midwestern city, also faced each other across a wide divide of
technology and operational efficiency. Their fortunes were diverging as
Darnay actively sought out next-generation advances in connectivity and
workflow design, all the time maintaining a strong client-centric focus.
Across Main Street, Tellson Bank & Trust continued to do business in much
the same way as it had done for the past 20 years.
“Tale of Two Trust Companies” (in grey
and summarized in Table 1) explores
designing the efficient, profitable
and client-centric trust company
while avoiding the risks of failing to
Table 1: A Tale of Two Trust Companies
Tellson Bank & Trust
Darnay Trust
Reporting
Limited format choice, no real-time data,
available in paper format only
Customizable and configurable, real-time
data, available on Internet & smart phone
UMA/UMH & Overlay Tools
Not available
Incorporating householding into trust
platform for tax & trading optimization
Custody
Manual reconciliations
Integrated with custodian
Aggregation
Manual only
Holistic wealth management
STP and Automated Settlement
Limited usage
Fully incorporated into workflow
CRM
Not utilized
Utilized and integrated into workflow
In-house vs. Outsourced Operations
In-house, staff of 20
Outsourced, paying variable fee
Workflow Automation
Limited, batch mode
Extensively utilized, real-time processing
Compliance & Regulations
Managed manually
Automated with online sign-off & alerts
Portfolio Management
Manual for clients & accounts
Automated handling of clients & accounts
Technology
Connectivity
Workflow
1
indicates the relative potential for
improvement methodologies, which
transaction network and custody
improvement by moving from being a
may be deployed based on where
vendors support the firm from behind
weak performer to a top-performing
a firm sees the greatest potential
the scenes. Trust companies may not
trust company.
for gain.
need to make the leap all in one effort;
Firms typically focus on the three
Best-in-class trust companies of every
improvements from year to year as
major areas of improvement,
size should consider focusing on their
they establish new partners, roll out
technology, connectivity and workflow,
core competencies while utilizing
new technologies and make process
separately. In fact, most organizations
modern trust and wealth management
changes as a regular part of their
develop their continuous improvement
technologies, platform connectivity
strategic development.
across the three dimensions over
and workflow to assist in supporting
time. Technology is the glue that
a more efficient wealth management
For your trust organization, are these
binds improvement methodologies
business model. For trust companies
the best of times with increasing
together for a best-practices trust
striving to be the best, that
profits and market share, or the worst
company. This paper lays out some
means greater emphasis on client
of times featuring a slow descent into
of the components of those major
relationships while top-notch platform,
wealth management irrelevancy?
they can work to develop continuous
Table 2: Opportunities for Improvement in Trust
Company Efficiency
Best Quartile
Average
Worst Quartile
Average
Opportunity for
Improvement
Trust Accounts per
Administrator FTE
200
60
233%
Trust Assets per
Administrator FTE
$300 million
$60 million
400%
275
75
267%
$400 million
$100 million
300%
Trust Accounts per Trust
Operations FTE
Managed Trust Assets
per Trust Investment
Officer FTE
Source: Fast Track Advisors LLC based on survey of trust companies with trust assets
under $5 billion
2
Wealth Management
Technology — Laying
the Groundwork for
Connectivity and
Workflow Optimization
platform requires the vendor to have
are those technologies that directly
the capabilities and resources to
impact retail customers and whose
help the trust company keep current
absence from a technology suite may
with developments in industry and
provide sufficient reason to change
regulatory changes.
wealth advisors. “Enablers,” on the
Status as a best-in-class trust
In an effort to conduct business with
organization begins with the
allow trust companies to serve the
a best-practices model in mind, trust
appropriate technology tools. In order
client in an optimal manner, but do
companies should be capable of
to provide connectivity and workflow
not directly interact and impact the
processing information and managing
efficiencies, technologies have to be
clients’ perceptions of the firm. Most
relationships in the manner best
flexible in terms of communication
technologies are “enablers” that allow
suiting their clients’ expectations and
and integration capabilities. As
for the timely and efficient handling
demands. This is easier when tools
the industry evolves, a trust firm’s
of clients’ assets, though they differ in
and procedures are customizable
business model and supporting
scope and impact.
and configurable for all user groups:
technologies should be able to adapt.
management, administrators,
Examples of technology enabling
For example, if the trust company
operations staff, investment officers
systems include Customer
needed to provide derivatives or
and clients.
Relationship Management (CRM)
other hand, provide efficiencies that
alternative investments to their
clients, the platform should be flexible
enough to account for, trade and price
such instruments.
systems, most wealth management
Wealth Management
Technology — “Differentiators”
vs. “Enablers”
Wealth management technologies
The trust accounting platform joins
may be classified as either “enablers”
all aspects of connectivity and
or “differentiators.” “Enablers”
workflow together for superior trust
facilitate the delivery of products and
operations. Selection of a technology
client services, while “differentiators”
Tellson Bank & Trust Company, operating from an elegant art deco building,
was famous for serving the wealthy since before the Great Depression.
The president of Tellson, Jarvis Lorry, stuck to his “old-iron” code-based,
green-screen trust system; his trust managers assured him that it still
did everything they needed. In reality, they worried that the process of
converting to a newer, more flexible system could risk errors and client
unhappiness. For Tellson to give clients new features like web and mobile
access, many expensive work-arounds would be necessary, and integration
with specialty systems was becoming ever-more difficult.
platforms (e.g., trust, brokerage and
investment advisor, but not online
brokerage), and access via the
Internet, which has become a required
capability in the wealth management
space. “Differentiators” include client
reporting systems, online brokerage
platforms and aggregated platforms
like Unified Managed Accounts (UMAs)
or Unified Managed Households
(UMHs) utilizing overlay tools.
Lack of, or weaknesses in,
differentiating wealth management
technology capabilities may cause
clients to consider moving to another
3
wealth advisor. Most wealthy clients
like-minded investors) they become
already have providers; therefore, in
open to moving their account. Best
members, beneficiaries, brokers
order to win their business, a wealth
reporting practices include:
and centers of influence like
management or trust company should
endeavor to offer that “something
extra” they are not receiving from
their current provider. Just any new
technology will not suffice; the new
technology should convey a broader
benefit that enhances the client value
proposition and therefore justifies
moving a relationship.
Clients complained about the
quality of their statements from
Tellson; a single format displaying
bare-bones cash and holdings
data. Ad hoc and real-time
reports were not available.
Clients had to wait until well into
the following month to get their
account information.
As noted, most technologies are
primarily “enablers,” with three key
exceptions:
• Reporting: Clients pay significant
attention to their investment
reports, looking for transparency
on what has been occurring with
their accounts. In fact, reporting is
so important that when a client sees
or hears of a better approach (for
example, at a cocktail party with
4
—— Attribution reporting explaining
to the client the value added by
—— Shared access with family
attorneys and accountants.
• Online brokerage platforms: Clients
their investment officers and
may elect to move their online
asset managers compared to
accounts to what they perceive as a
movements due solely to the
better online platform (for example,
market (“alpha”).
one with a superior options tool);
—— Performance at the account,
household and investment
“sleeve” levels.
—— Customizable, easily configurable
reports.
—— Real-time holdings with current
pricing information.
—— Information “where they want
moving from one online firm to
another is significantly easier than
moving from one trust company
to another.
• Overlay and optimization tools:
More and more clients want the
advantages of UMAs and UMHs
utilizing investment management
and overlay tools to gain tax and
it, when they want it”; in other
trading optimization while providing
words, available both online
a holistic view of their wealth.
and, increasingly, on their
Further benefits of utilizing UMAs
smart phone.
and UMHs for trust companies and
clients are explained on page 8.
Darnay outsourced operations processing with a progressive partner who
had also developed their trust platform. The CEO of Darnay Trust, Lucille
Manette, asserted one of her strategic objectives was to actively seek
out integrated technology and operations in order to lower costs and
increase efficiencies.
At Darnay Trust, client reports were configurable and customizable, flexibly
addressing needs of different clients and their administrators. Real-time data
offered timely reporting, on the fly, which could be accessed by the investor,
their administrator and their investment officer over the web, web-enabled
tablet or smart phone.
Diagram 1: Integrated Trust & Wealth Management Platform
The Trust & Wealth Management Platform
Trust Company
Platform Users
• Advisors
• Clients
• Operations
Integration
Partners
Client On-boarding
• Asset Managers
Trust Accounting
Automated Account Review
• Administration
Financial Planning
• Brokers
• Trading
Investment Management
• Cash Mgmt.
Reporting & Performance Measurement
• Securities Lending
Internet & Mobile Access
• Advanced
Performance Tools
Wealth Mgmt. Firm Infrastructure
In-house Support
• Market Data
• Integration Tools
Platform Vendor Support
Custody
The trust and wealth management
technologies are “enablers” in no
The Integrated Trust & Wealth
Management Platform
way minimizes their importance
Trust technologies should be
which a trust company is built. Once
in improving efficiency through
flexible enough to adapt to future
an organization has installed the
connectivity and managing enhanced
developments in connectivity such as
appropriate technology, it should
workflows; in fact, that is how they
aggregation and custody integration,
become much easier to drive their
add value. Enabling technologies
and to enhancements in workflow
unique value proposition and deliver
facilitate the transmission of
like single-entry of data and real-time
best practices in connectivity and
information seamlessly across the
securities settlement. They need to
workflow necessary to expand
wealth management space from
handle an increasing complexity of
profitability.
advisor desktop through middle-
wealth management products and
office to back-office systems, and
investment vehicles and should be
then connect with systems from third
user friendly for operations staff as
parties like exchanges, custodians and
well as administrative staff. Diagram
pricing vendors. These capabilities
1 reflects a best-practices wealth
are largely unseen by investors and
management platform technology
only in their failure do they become
architecture, identifying both systems
noticeable.
users and integrated outside systems.
The fact that the majority of
platform is normally the hub around
5
Wealth Management
Connectivity —
Improving ClientCentric Integration
Trust companies exist in a world
of different markets and wealth
management capabilities, all of which
are being brought together through
connectivity for the end-user wealth
management client.
Tellson minimized connectivity
with wealth management
partners because of the
constraints of their technology.
For clients with assets not held at
Tellson, there was no information
concerning those assets on their
trust statements. Trading costs
were high, tax efficiency difficult;
there was no form of holistic
wealth management available to
Tellson’s clients.
Custody has become an area of major
a custodian in those markets. As a
focus for trust clients. End-user clients
result, the best domestic and foreign
are expressing a preference for the
custodians are developing integrated
largest and best-known custodians.
global custody capabilities.
Trust companies require a reliable
partner that can assist in meeting
Custodians are responsible for
their clients’ expectations. There are
tracking corporate actions, providing
four major custodians in the U.S.;
data to assist in reconciling clients’
however, trust companies also have
share counts and prices. Automation
options from among hundreds of
and tight integration with the trust
smaller custodians. In the long term,
accounting system can avoid failure
it is difficult to see how these smaller
to catch corporate actions that may
custodians will have the capital
result in errors.
strength to keep up with demands
for superior technology and security,
while meeting expanding asset
classes, geographies and regulatory
requirements.
The extensive effort spent in
reconciliation of custody accounts
to client holdings, usually performed
in conjunction with the month-end
statements, is a waste of operational
Wealthy clients are looking at a global
and administrative time. A trust
world in terms of investment choices.
company best-practice that
Best practices require that trust
generates significant efficiencies
systems be able to handle multiple
and cost savings is automatic daily
currencies from investment markets
reconciliation between custody
The custody business is growing more
around the world. When clients invest
records and holdings. Statements get
complex as the regulatory landscape
in international investments, the
out sooner, with fewer errors, utilizing
evolves and competitive pressures
investments may need to be held by
less staff. Clients are happier and
Custody
require additional investments in
profits improve.
technology and development of
greater controls. Optimal integration
requires highly functional connectivity
between the trust companies and
their custodians.
6
Tellson’s clients, many of whom travelled or worked internationally, had
started to express a preference to diversify their investments beyond U.S.
markets. Although Tellson’s investment officers were now offering a few
international mutual funds and ETFs, individual foreign equities that traded
outside the U.S. were not available to be included in clients’ portfolios.
Aggregation
Wealthy clients seldom have all their
assets with one firm. Clients often
prefer to utilize investment models
provided by a variety of types of firms
(e.g., trust companies, broker-dealers,
registered investment advisors, direct
product providers and qualified plan
providers through their workplace).
Clients want the freedom to be able
to select from among an almostunlimited universe of investment
choices across markets, countries,
currencies, asset classes and
custodians. Success does not come
from telling the client, “We can’t
do that.”
The wealth management advisor
who can provide a holistic view of
the client’s wealth across multiple
providers can generate several
significant benefits:
• Some trust organizations may be
required to comply with laws or
trust documents that require assets
to be managed as a single portfolio
necessitating a holistic view across
asset types.
• The wealth manager that does the
best job of aggregation is likely to
be perceived as the lead advisor for
the client, enabling them to manage
more of the client’s assets over time.
• Firms that successfully aggregate
This trading efficiency can either
the client’s assets will have
be accomplished directly on the
opportunities to gain “share of
trust platform, through integration
wallet” and increase revenues
with a brokerage platform, or on an
by managing the client’s wealth
integrated platform that includes
in a holistic manner. Clients see
functionalities of both trust and
holistic wealth management as
brokerage. It is the benefits of STP,
an enhanced value proposition
not the method, that matter most.
enabling them to take advantage
of superior reporting and tax and
Settlement
trading efficiencies.
Straight-through processing is an
effective process almost all the time,
Aggregation can be accomplished by
several methods, including screenscraping and permissioned access.
However, the superior methodology
is real-time aggregation via direct
electronic connectivity to the
custodians.
Straight-Through Processing
of Securities Trades
Where trust investment officers
are initiating trades in individual
securities, rapid execution of the
investment strategy is preferred. This
but occasionally trades fail to settle.
(In the U.S., these are called “DK” or
“don’t know” trades.) At that point in
time, the trust company is waiting on
settlement, has advanced either cash
or securities and has not received back
the opposite side of the trade, thereby
tying up both valuable capital and
operations time to fix the problem. By
utilizing a better-integrated settlement
process, trading organizations close
trades and post to client accounts in
a more expedited manner.
can be accomplished by an automated
When a trade fails to settle, both
process known as “straight-through
trading parties are exposed to the
processing” or STP. Leading STP
changes in the market price of the
capabilities include entering the trade
securities and subsequently may
once, with the system automatically
have to resolve responsibility for
selecting the optimal exchange, the
potential losses and gains. Such
universe of accounts that the trade
negotiations can add significantly
will be executed for, and confirming
more administrative time and cost
the trade rapidly.
to the process.
7
Streamlined settlement can occur
A CRM system also allows senior
of the portfolio as directed by the
through a centralized matching and
management to monitor prospects
underlying asset allocation model.
affirmation process, or it can be the
as they move through the sales
Even when incorporating a UMA or
result of a single custodian working
pipeline to become clients; such
UMH, preferred platforms should
to speed matching and settlement.
tracking is necessary as the trust
still support trust functions such as
Either is a preferable process
business has a lengthy sales cycle
principal and income management,
when compared to taking a “wait
often measured in years, not months.
disbursements and trading
and see” approach or relying on a
CRM systems facilitate sales and
restrictions.
simple exception alert process. In
revenue projections. Managers
partnership with a strong custodian,
should efficiently deploy their sales
UMAs and UMHs are normally able to
trust companies can institute better
force based on the number of client
provide optimization across a variety
settlement failure management and
households serviced and the number
of investment products and account
increase profitability.
of sales opportunities being handled.
types, including personal trust,
brokerage and retirement accounts.
Connecting to a CRM
Enhances Client Management
& Data Handling
It is inefficient to enter data more
UMAs, UMHs, Downloadable
Models and Investment
Management Tools for a
Holistic Wealth Solution
Duplicate holdings and trading
inefficiencies are eliminated, while tax
optimization is supported. Utilizing the
aggregation tools, the client’s entire
than once. Prospect and household
Increasingly, investment managers
data should be set up in a Customer
offer clients a large menu of external
Relationship Management (CRM)
asset managers who have passed
Connectivity savings can result from
system and that data should be ported
the trust company’s due diligence
using a platform that can download
to the on-boarding and investment
process. This business model is known
the asset managers’ portfolio models,
policy statement systems once the
as “open architecture.” The asset
rather than handling and trading
prospect becomes a client by utilizing
managers are usually selected based
actual client portfolios. These models
appropriate integration.
on their style and expertise, and
are then traded as efficiently as
then assigned to manage a portion
possible for the entire client universe
wealth can be managed holistically.
while the investment management
(also known as “overlay”) tool looks
Darnay provided their clients with the benefits of an integrated platform
and custody, enabling accurate statements to be available within three
days of month’s end. Holistic wealth management was a hallmark of the
Darnay trust relationship, which clients valued. Client fees were moderately
higher at Darnay because of the superior value proposition, and profits
were significantly higher due to efficiencies of advanced technology
and connectivity.
8
for appropriate trade sizes, crosstrades and tax loss opportunities
in order to create a more tax- and
trading-efficient portfolio. Clients
who receive this service perceive a
stronger value proposition and are
clients to meet their trust and wealth
Upon entering Tellson’s opulent 18th floor trust offices, clients were greeted
by dark paneling and expensive artwork. Being a Tellson’s client had once
had a certain cachet, but that cachet was rapidly diminishing in the modern
wealth management era. Jarvis Lorry insisted on continuing their old-style
trust culture, and his decision was reflected in their operational procedures.
Mr. Lorry required his trust operations staff to work downtown in the office
tower where he could walk around and chat with his employees, many of
whom had been with the bank for over 20 years. Operations staff also
walked around, transferring client information from one staff member to
another for processing.
management objectives.
Workflow Automation &
Management
Savings through workflow automation,
which emphasizes the superiority of
the outsourcing model while leaving
trust companies to focus on their core
competencies, does not come easily.
often willing to pay higher fees for
and custody records reconciled.
Whether selecting an outsourcer or
enhanced benefits. A UMA or UMH
Strong workflow automation and
processing internally, trust companies
offering based on downloaded
real-time processing can provide a
may need to consider the various
models is usually more profitable to
better client experience by reducing
workflow methodologies to improve
the firm than a portfolio made up of
the time to perform these tasks and
operations.
either individual securities plucked
resulting errors.
from a focus list, mutual funds or
managed accounts. Industry trends
indicate that clients with UMA or UMH
Outsourcing vs. In-house
Processing
accounts are less likely to leave their
Trust companies have two major
wealth advisor.
options for processing: They can
perform all the functions in-house
• Real-time processing of the trust
workflow provides a current,
updated status of transactions,
holdings and prices. Many trust
operations still process in a batch
or modified-batch mode, either
out of choice or due to technology
Optimizing Workflow for
Greater Profitability
with their own staff or outsource
Once a trust company has selected
While in-house processing may
the best technology and integrated
initially appear cheaper, the potential
with the best global partners, they can
lack of scale in an increasing-cost
then focus on cost reduction through
environment and the difficulty of
improving their internal workflows.
locating trust operations staff to
Trust operations staffs process an
replace retiring personnel, especially
inordinate amount of data; accounts
in smaller markets, ultimately argues
are opened, assets transferred in,
for outsourcing. This enables the
appropriately managed access and
disbursements are made, portfolios
trust company to focus on what they
accountability, and provide a strong
are traded, statements are produced
do most capably — working with their
audit trail.
to an organization that specializes
in processing for trust companies.
limitations. Real-time processing
allows monitoring of productivity
and immediate correction of errors
should they occur. Cash balances
and positions are available as
of the moment for evaluation
by investment officers and
administrators.
• Permission-based sign-ons support
9
• Standardized operational
procedures minimize multiple
variations in a process.
• Data should be entered just once,
and that entry should be automated
where possible. For example:
—— Prospects in CRM systems
should automatically move with
their information to the trust
accounting platform once they
become clients.
—— Asset information should fill and
Technology Supporting
Compliance & Risk
Management
to ensure that the investment
objectives and the trust
Common Law and dating back to the
management are in alignment.
Crusades, trust establishes a fiduciary
Automated systems that share
responsibility. Modern technology and
data among administrators
operations should be able to support
and investment officers, while
all regulatory requirements.
allowing for geographically
and time-separated evaluation
Depending on the specific needs of
the trust company, trust platform
custodians.
need to administer a multitude of
managers through to exchanges
and clearing operations after
being entered just once.
composition and diversification
wealth management. Based in English
automatically reconcile with the
seamlessly from investment
regulations related to portfolio
The trust business is a unique form of
providers and outsourcers may
—— Transactions should flow
• Monitor adherence to applicable
requirements:
• Cost-basis reporting for different
types of investments; related rules
are being rolled out across different
and sign-off by the trust team
and supervisors, facilitate
greater workloads and can alert
management to open issues such
as uninvested cash and holdings
incompatible with the investment
policy statement.
• Support of pre-trade and post-trade
asset classes over time. Cost-basis
procedures is necessary to catch
reporting requires detail tax lot
inappropriate trades between
office workstations, middle-office
tracking by trust platforms in order
account reviews.
accounting systems and custody
to report to clients and transfer
—— Holdings must be evaluated to
reduces errors in holdings.
data to future holders.
eliminate assets that violate the
• Identity theft and privacy
trust agreement or Investment
• Tight integration between front-
• For each workflow step, dashboard
Policy Statement (IPS).
metrics, alerts on open items
requirements call for appropriate
and error tracking should be
handling of trust accounts with
available to the appropriate staff.
the capability to notify clients
to detect uneconomic de
Dashboard data should be enabled
as necessary should suspicious
minimus trades.
to “drill-down” to the underlying
information or data breaches occur.
details.
Access authentication for financial
accounts should be robust.
—— Platforms may need the ability
—— Alerts and dashboards that notify
investment officers in advance
that the trade may cause a
violation of guidelines can be
very useful.
10
Risk mitigation requires trust
Risk modeling of the portfolios is
provide certainty about achieving
management to regularly review
important to develop satisfied clients.
objectives that can be shared with the
outside vendors regarding capabilities,
Most portfolios begin with an asset
clients. Historic or adversely skewed
reliability and financial strength.
allocation model based on the clients’
simulation curves are optimal, but
Reviews are required of custodians
risk profile, investment time horizon,
Monte Carlo simulations are better
and product providers such as
disbursements plans and existing
than nothing.
mutual fund, asset management
holdings, each as identified in the IPS.
and insurance companies that are
Once basic asset classes (equities,
utilized on the platform and within
fixed income and cash equivalents)
the trust company.
have been selected in broad
proportions, individual allocation is
Portfolio Management
made by sector, market and size of
The workflow requirements of
firm capitalization.
managing clients’ assets are extensive.
Trust investment officers need to
be able to build portfolios, evaluate
performance, make changes in client
holdings in multiple asset classes and
rebalance accounts. Efficient portfolio
management systems allow these
activities to be done at the
account or at the group of accounts
level. Accessing pricing data and
performance tracking software is
mandatory.
Many trust investment officers utilize
mutual funds, common trust funds
and ETFs in their client portfolios.
Tools that can help detect style drift
and protect against unintentional
overconcentration in the underlying
equities can be very useful.
Conclusions
Trust organizations of all sizes
can establish a winning wealth
management model by deploying
leading practices in trust technology,
connectivity and workflow. Key
requirements for success include:
• Technology that features real-time
flexible reporting and householded
accounts with tax and trading
optimization.
• Connectivity that connects trust
companies with outstanding custody
At the end of the day, the investment
officer must be reasonably certain
about achieving the clients’ objectives.
Portfolio modeling simulation helps
and trading network vendors.
• Workflow that automates processes
and helps the trust company keep
current with portfolio compliance
requirements, with serious
Darnay Trust’s employees knew that, within the bounds of good fiduciary
practices, they needed to process information in the manner that best suited
their business model and their clients’ expectations and demands. Workflows
were automated with tools that made processes rapidly customizable and
configurable. Portfolio compliance was facilitated through an automated
collaborative environment. Portfolio management was appropriately enabled
to follow the best practices of the asset management industry. Dashboards
and alerts kept Darnay’s employees abreast of developing portfolio issues
before they could impact the client.
consideration given to outsourcing
either or both trust operations and
investment management.
Opportunities for success can best
come from skillful partnering with
top-rated providers of technology,
11
custody and transactional networks
Best-in-class status does not occur
while the trust company focuses
by happenstance; it is a deliberate
on their core competencies. Trust
long-term strategy designed to
companies should utilize their capital
optimize the profitability of the
and expertise primarily in improving
organization and provide the end-user
client relationships to enhance
client with a differentiated wealth
profitability.
management value proposition. It
requires talking with top vendors in
Outstanding technology integrated
custody, technology and outsourcing
with exceptional business partners is
to understand how their solutions
a necessary component to becoming
can improve profitability and client
a more efficient and profitable
focus. A strong team of dedicated
operation. Success still requires that a
trust company personnel and the
trust company be staffed by energetic
right partners can create not just
administrators, investment officers,
a high-quality trust organization,
operations staff and managers, all of
but a “best-of-times” wealth
whom should be actively recruited
management firm.
and retained.
It is a far, far better thing I do than I have ever done…
Darnay Trust achieved loyal clients and greater profitability through
harnessing the power of technology and connectivity to streamline workflows
and become more client-centric. By exploiting efficient processes, they were
able to minimize the number of staff while maximizing throughput in
terms of transactions, quantity of clients and amount of client assets.
Because of these efficiencies, Darnay Trust was able to be more responsive
to their client requests for information and access to global assets and
custodians. Darnay’s clients were happy with the self-service capabilities
of their web and mobile access.
Right now, a new trust client is moving down Main Street. An existing client
referral, he is headed to his first appointment with his new wealth manager,
Darnay Trust.
12
About the authors
Jonathan Flitt
Director
Securities and Fund Services, Citi
Jonathan is a Director and Product
Manager for Citi’s OpenWealth�
Trust Platform. In his current
role, Jonathan is responsible for
product development and product
management.
Jonathan began his career with Citi
in 1993, as an Operations Manager
supporting Smith Barney’s retail
products, including mutual funds and
brokerage. During his 18-year career
at Citi, Jonathan has held a series of
managerial roles within Smith Barney
Consulting Group, Citigroup Asset
Management and currently Citi’s
Investor Services.
He is a frequent speaker and is widely
quoted in areas of asset management
outsourcing and wealth management.
Actively involved in industry groups,
Jonathan is the Co-Chair of the
Money Management Institute’s
(MMI) Technology and Operations
Committee. He has been an active
member since the committee’s
inception in 2000.
In 2010, Jonathan received the MMI’s
All Star Achiever award for leadership
and contributions to the managed
accounts industry.
Jonathan holds an MBA from New
York University, The Leonard N.
Stern School of Business and a BS
in Business Administration from
the University at Albany, the State
University of New York.
Robert J. Ellis
Principal
Fast Track Advisors LLC
Robert J. Ellis is an experienced trust
professional and wealth management
consultant. He is a Principal with
Fast Track Advisors LLC focusing on
wealth management providers’ client
segmentation, product and delivery
channel strategies, with subsequent
implications for wealth management
technologies, including platforms,
planning and distribution systems.
Bob has over 25 years experience
in financial services. Previously, he
directed the wealth management
practices at Celent and Novarica, both
research and consulting firms. Bob
has held senior executive positions
managing trust, brokerage, financial
planning, asset management,
non-branch delivery channels and
insurance business units.
Bob is the author of a variety of
industry studies on trust companies,
client segmentation, managed
accounts, UMAs and TAMPs, online
brokerage, social networking, financial
planning, compliance systems and
variable annuities.
Bob has been widely quoted in
publications including Dow Jones’
The Wall Street Journal and Barron’s,
and by news services like the Dow
Jones Wire, Reuters, National Public
Radio and Associated Press. He has
also appeared in dozens of industry
publications such as Registered Rep.
Bob earned an MBA from the Harvard
Business School and a BBA from the
University of Michigan, as well as
gaining licenses as a CPA, securities
principal and life/health/accident
insurance agent in NY.
He can be reached directly at
rellis@fasttrackadvisorsllc.com or at
(607) 345 0800.
About Citi’s OpenWealth®
Citi’s OpenWealth seamlessly
aggregates household-level data
across wealth management platforms,
investment managers and thirdparty custodians, and offers awardwinning unified managed household
capabilities for a front-to-back
solution that eases key operational
and administrative burdens and
lets managers focus on building
relationships and growing their
business.
OpenWealth’s trust solution provides a
complete package of trust accounting,
operations outsourcing and custody
services. With a complete suite of
modular services that incorporate
modern technology, automated
workflow, extensive flexibility and the
experience of a leader with a proven
track record of building client-focused
solutions, OpenWealth’s trust solution
helps managers increase efficiency,
monitor compliance and improve
client service.
About Citi’s OpenInvestorSM
Citi OpenInvestor provides
complete investment services for
institutional, alternative and wealth
managers through OpenWealth.
Citi OpenInvestor combines the
specialized expertise, comprehensive
capabilities and the power of Citi’s
global network to help our clients
meet their performance objectives.
With an on-the-ground presence in
over 95 countries and over $12.5
trillion in assets under custody, Citi
offers award-winning service and
unmatched scale.
To learn more, contact
Brian Corkery at (617) 824 1262/
brian.corkery@citi.com
or Jonathan Flitt at (212) 816 6953/
jonathan.flitt@citi.com.
Global Transaction Services
www.transactionservices.citi.com
© 2012 Citibank, N.A. All rights reserved. Citi and Arc Design and OpenWealth are
registered service marks of Citigroup Inc. OpenInvestor is a service mark of Citigroup Inc.
925996 GTS25897 03/12