At a glance
- Watson, who has run two bank trust departments, said the trustee slot is the leak in an otherwise sound retention strategy.
- A bank trustee named in estate documents typically has its own wealth management business waiting, and the assets follow the trustee when the original client dies, according to the interview.
- For advisors, the risk is inherited assets: Cerulli Associates projects $124 trillion will change hands through 2048, $105 trillion of it to heirs, and more than 70% of heirs are likely to fire or change advisors.
RIAs that want to keep assets across generations can add trust services without building a trust department from scratch, Ezra Group executive-in-residence Sharon Watson said in an interview with WealthTech Today.
Watson, who has run two bank trust departments, said the trustee slot is the leak in an otherwise sound retention strategy. A bank trustee named in estate documents typically has its own wealth management business waiting, and the assets follow the trustee when the original client dies, according to the interview. Naming a relative carries its own risk: BOK Financial's Rosemary Hueser told InvestmentNews that family trustees often struggle with discretionary distributions.
For advisors, the risk is inherited assets: Cerulli Associates projects $124 trillion will change hands through 2048, $105 trillion of it to heirs, and more than 70% of heirs are likely to fire or change advisors.
Reported by the Practice management desk from WealthTech Today and InvestmentNews. Published . Corrections