Navigating Evolving Client Needs in Trust Services in 2023 and Beyond

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The trust services industry in Singapore is currently well regulated by authorities, with trust companies requiring a Trust Business Licence from the Monetary Authority of Singapore to provide trustee services. However, as the trust industry becomes more competitive, it is essential that trust companies continue to be subject to an appropriate level of regulation and compliance.

 

“This is so that clients may maintain their confidence in the trust industry, whilst allowing the trust companies to deliver first-class trustee services to clients without being overly regulated,” says Ethan Chue, WMI faculty member, CEO of Family Succession Advisors and former Head of J.P. Morgan Trust Company (Singapore).

 

In an interview with Ethan, he shared his insights on future trends in the trust services industry, including the evolving needs of clients, the impact of emerging technologies, and the competencies that will be most important for professionals in the industry to possess in the future.

Adapting to meet the evolving needs of clients

Ethan believes that clients’ needs are changing, and there is an increasing demand for non-financial assets, such as operating businesses, to be held in family trusts. Planning for the succession of these businesses is more complex than planning for the transfer of financial assets.

 

“Additional issues which need to be considered include planning for the succession of the management of the family business, instilling family governance policies and procedures, balancing between the differing interests of family members, and so on,” he says. “Therefore, trust professionals need to broaden their skills to serve their clients well in these areas.”

 

The impact of emerging technologies such as blockchain and AI

The adoption of emerging technologies such as blockchain and AI has also created new opportunities and challenges for trust professionals.

 

As more trustees are asked to consider allocating some part of the trust portfolio to Bitcoin and other blockchain-recorded investments, trustees find themselves having to understand how these non-traditional investments may be made and held. They also need to review their trust documentation and internal trustee policies to assess if these investments are permitted to be held in the trust.

 

Moreover, the increasing capabilities of artificial intelligence have raised concerns about IT fraud. Ethan raises the question, “As the capabilities of artificial intelligence improve exponentially, and with the increase in instances of IT fraud, how can a trustee ensure that the email seemingly sent by the client — and phrased in the same manner as the client’s usual correspondences — was really sent by the client and not a hacker supported by AI?”

 

Trust advisors must stay informed about these emerging technologies and find ways to mitigate risks associated with them.

Interpersonal relationships are key

Ethan believes that maintaining a close relationship with clients is crucial, especially as the use of technology has enabled trustees to meet clients virtually but more frequently. However, many trustee-client relationships have suffered due to reduced face-to-face interactions.

 

Trust professionals need to find ways to maintain a close relationship with their clients to better understand or anticipate issues that may arise in the client’s family situation.

 

Secondly, according to Ethan, the competitive landscape of the trust services industry is likely to evolve in the next 5 to 10 years, with the consolidation of trustee companies and new players entering the market. Therefore, trust professionals need to learn about other functions in their team or organisation to build more cross-functional collaborations and learning.

 

“My suggestion is that whatever role you are currently in  – be it trust advisory, trust administration or compliance – having a good understanding of what your colleagues have to deal with on a day-to-day basis will not only allow you to build a more collaborative working relationship with them but will also put you in a position to take on bigger or management roles when the opportunities arise,” says Ethan.

 

Getting ahead of the curve

Trust advisors must possess an unquenchable thirst for knowledge even in disciplines that are outside of their own fields of specialisation in order to stay ahead of the curve. These include topics including investments, law, psychology and economics.

 

“Learn about the industries your clients are operating in, so that you may better understand the business challenges they face,” adds Ethan. In this respect, Ethan highlights the importance of upskilling and attending events and courses organised by industry thought leaders.

 

“WMI’s Certificate of Trust Services (CTS) and Wealth Planning programs are useful to equip both trust and non-trust professionals with relevant and practical industry knowledge.  For example, through the CTS program, a trust officer may understand the rationale behind some of the administration processes he or she undertakes daily, or a family office manager may appreciate why the trustees require certain documentation to be executed for the proper administration of the trust.”

 

Designed for professionals in the trust and fiduciary services industry, WMI’s practice-based trust services programmes are carefully curated to include real-world examples and case studies and are taught by distinguished industry professionals.

 

WMI’s sought-after Trust programmes are accredited and recognised by the Institute of Banking and Finance Singapore (IBF), the Singapore Institute of Legal Education (SILE) and the Institute of Singapore Chartered Accountants (ISCA). Past participants have included trust administrators and managers, wealth planners, wealth managers, lawyers, accountants and family offices.

 

Learn more about WMI’s Trust programmes

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