Automation is helping trust administrators to deliver a much more effective service for their clients in an increasingly competitive world, says David Poole, Executive Chairman of Cognition.
When you think of how automation technology is changing the face of industry, trust administration probably isn’t the first area that springs to mind.
An extremely complex and specialist area of the financial industry, it has traditionally involved trustees carrying out their fiduciary duties as well as managing their client’s investments and taxes using extremely manual processes.
Yet in the face of increasing competition and growing regulation, many trustees are now coming under immense pressure to reduce costs at the same time as serving their clients more effectively.
This is where the latest technology can help. Below are just some of the ways automation technology is helping trustees to futureproof their operations, increase efficiencies and improve their profit margins all at the same time.
Automated bookkeeping
With automation, trustees are no longer reliant on waiting to receive information from wealth managers and custodians in PDF statements and file formats, claims investment software firm Landytech. Instead with a platform built on open architecture connectivity principles, trustees can receive a daily feed of client transactions and positions, which can be fed automatically into their accounting system. Not only is this timelier and more accurate, it also allows for an exceptions-based reconciliation process, thereby reducing manual intervention.
Near real-time investment monitoring
With such a time lag between quarter end and the point trustees receive portfolio reporting, it can be difficult for trustees to know whether managers are staying within investment guidelines. However, timely data enables trustees to set up daily limits monitoring, complete with alert notifications and pre-warning levels. This ensures that investment managers operate within investment policy statements (IPS) with any breaches quickly flagged up and rectified.
On-demand reporting
For many years trustees have become used to the convention of quarterly investment reporting. As a result, they can be forced to wait up to eight weeks after the end of the quarter to receive any kind of reporting from their consultants and investment managers. With clients expecting ongoing dialogue based on the latest information, trustees are under pressure to reduce this time frame through automated data sourcing and on-demand reporting.
Complete visibility across ownership structures
With families almost always having multiple separate legal entities to manage their wealth and accounts for succession planning, trust structures are becoming ever more complex, claims Landytech. Trustees with the right technology in place can enable families to get full transparency into complex, multigenerational family structures from legal entities, subsidiaries and portfolios, right down to individual assets and liabilities.
Automated document generation
Creating documents, such as wills, trusts and powers of attorney is a key role of a trustee. Automation helps ensure these documents are accurate and compliant with applicable laws and regulations. The technology can also be used to generate correspondence that is sent to beneficiaries, trustees and other stakeholders. This can help to streamline communication and ensure that all parties are kept informed about the status of the trust.
Providing fee breakdowns
Having accurate data enables trustees to control and report on fees such as management fees and custody fees much more effectively. Complete transparency on fees can help family offices and UBOs (Ultimate Beneficial Owners) identify areas where they could renegotiate high fees and ensure they are being charged what was contractually agreed.
Conclusion
Trustees are under growing pressure to provide a better client experience at the same time as maintain profit margins. Increasingly, clients expect much more timely and detailed reporting of their assets while greater regulations and increased competition threaten the bottom line for trust administrators.
By taking advantage of the latest automation, trustees can move away from time-consuming manual data processes such as keying in contract notes or paper statements and filling in endless forms and use their time more effectively to leverage their expertise in order to add value and oversight. Not only will this strengthen their relationships with existing clients, it could also potentially help to win new clients.
If you want to find out how we can help improve the way you handle trust administration and start seeing greater efficiency and value in how you deliver for your clients, get in touch: David.Poole@cognitionhq.com