FiPar

Trust Outsourcing

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With increasing transformation of the financial services industry, financial organizations seek to optimize their business capabilities in order to expand market and wallet share. Trust outsource providers assist in this endeavor by providing such organizations with competitive strategies to expand business capabilities while maintaining focus on core business objectives.
 
 
Strategy
 
By aligning products and services with client expectations and preferences, selecting appropriate delivery channels and formulating effective marketing campaigns, community banks, investment advisors, credit unions and other financial organizations can be successful in serving needs of affluent trust clients seeking sophisticated financial management services.  And, providing those services on an outsource basis can be profitable to the sponsor while representing value-added services to customers.
 
 
Trust Outsource Providers
 
Selected corporate fiduciaries offer turnkey trust outsourcing services while others offer outsourcing on an account-by-account basis.  Still other providers offer outsource processing of selected components such as back-office operations.
 
"Turnkey trust outsourcing" can perhaps be more accurately defined as insourcing since it involves delivery by the provider of an entire business line that enables the client to leverage virtually all resources of the provider.  Furthermore, selected providers will even offer their clients branded-identity.
 
 
Issues
 
Issues in selecting outsource providers can include:
  • State or federal charter
  • Governing trust laws
  • Regulatory approvals
  • Interstate trust activities 
  • Ownership rights
  • Duties and responsibilities
  • Fiduciary and business risks
  • Capitalization requirements
  • Costs--up-front, on-going & termination
  • Fee share
  • Business lines offered
  • Insurance protection
  • Portability and conversion
  • Minimum asset growth requirements
  • Reserving investment management responsibilities
  • Required skills

 

Evaluation and Selection

FiPar assists financial organizations evaluate benefits associated with outsourcing versus traditional business models and helps them select appropriate providers.  Turnkey outsourcing represents a strategic opportunity to leverage the providers resources--capital, technology, time and intellectual capabilities--while gaining competitive advantage in the marketplace.   

Simple Concepts  --  Powerful Solutions (sm)