Accountants & Solicitors as Trustees

If you act as a trustee for any of your clients,
you should read about this research.

A Research Project conducted for
Strategic Asset Management Ltd & the Centre for Fiduciary Studies (Australasia) Ltd
by the Crummer Graduate School of Business, Rollins College, Florida, USA.

What was the purpose of this research?

This project was commissioned to discover the kinds of services clients want from their accountants and lawyers who serve them as trustees. The study also looked at what trustees thought the clients wanted from the relationship.

How was the study conducted?

Groups of accountants and lawyers were brought together to participate in facilitated discussion about what they thought their clients wanted from them as trustees. Groups of clients were also assembled to talk about what they wanted from the relationship they have with their trustees. The discussions were led by six MBA students from the Crummer Graduate School of Business and resulted in the generation of consensus ideas with common themes. The technical name for this type of research is the nominal group technique. It has been found to be a reliable way of eliciting and organising information.

The ideas coming from the discussions were organised under common themes. The two groups – accountants/solicitors and clients – voted to rank the themes in order of importance.

What were the major findings?

It was found that clients want entirely different things from what their trustees imagine. Accountants and solicitors who act as trustees thought their accounting/legal skills added the most value to the relationship. The clients expect their lawyers and accountants to be competent in their own area of expertise and want their trustees to offer a range of investment management skills. Trustees do not, in the main, have these skills or are unprepared to offer them.

In order of importance, the elements clients most want from their trustees are:

1. Integrity and transparency
   Clients want to clearly see and understand the fundamental issues involved in the strategies being used to manage their investments.
2. A clear understanding of their needs and goals
   A personal approach is required so investment strategies can be developed for the clients’ individual needs.
3. The ability to manage risk and return
   Clients want assistance in understanding the relationship between risk and return and how to manage this. They see a lot of value in having their trustee involved.
4. Delivery of good performance
   Trustees thought this meant delivering good legal and accounting service to their clients. Clients did not mention as an issue that adds value. Rather, when the lawyer or accountant is involved as a trustee, clients want their assistance in investment matters to help them manage risk and return to achieve a good investment outcome.
5. Personal communication and reporting
   Clients want simple and unambiguous language. They want their particular reports to be personalised.
6. A focus on results
   This was the least important issue of the six. Clients and their trustees value a firm that has an established track record but the other factors ranked higher.

Conclusions

If professionals are to be better at meeting the expectations of their clients, they need to consider how they might more effectively deliver the services required.

Use of prudent experts in the field of investment advice would clearly assist professional trustees to:

• bridge the gap between what clients want and what professional trustees are comfortable in offering;
• mitigate the business and professional risks associated with giving advice in the field of investment planning; and
• reinforce the core role of the lawyer/accountant.

If your client wants truly impartial advice, contact us to find out how we can help them put their money to work to fund their important goals.

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