uk trustee act 2000 has noticeable impact on business flows
Investec Bank in Guernsey has won cash mandates worth £400m from trust companies over the past four years. David Fitch, senior manager of Investec Bank, said it has enjoyed a growth in trust business because of improving service levels and the lower charges it levies than some clearing banks in Guernsey.
Fitch said £350m of the trust cash has been attracted over the past two years. Most of the mandates have been granted by trust companies in Guernsey, although some have also come from Jersey, Switzerland and the Isle of Man. Included among these mandate wins was Saffery Champness in Guernsey moving the entire banking for its trusts to Investec. Fitch added: "Saffery Champness had been with another bank for 35 years but moved to us because they were not happy with the service."
He added that another senior manager, Karen Blanchard-Foster, is moving to Jersey to try to replicate Investec's business model there and it will step up its marketing in Switzerland and the Isle of Man.
"What we have done to win this business is not rocket science," said Fitch. "There are a few aspects to this. We have offered the service levels that other banks in the Channel Islands provided 10 years ago. This is a personal service. Trustees are given the direct numbers of the senior managers of the bank.
"If we are not here then the phone is always picked up by a member of the client services team. They understand the urgency that trustees require money to be transferred or information provided to their clients. Trustees are also given the direct line of the managing director. We do not use call centres or outsource administration."
This level of service obviously costs money but Fitch said Investec is able to reduce charges by having its own treasury team in Guernsey. "Some other banks have to go through treasury departments in London or Edinburgh. This means both the head office and Guernsey take a cut whereas at Investec only our Guernsey office takes out fees."
Fitch said the Trust Reserve Account had also proved popular with trustees.
"Some trustees do not like one-month fixed rate accounts because every month they have to set up a new account. The other problem is that sometimes they will set up the account and two weeks later the client will say they urgently need the money. But with the Trust Reserve Account it never ends, with the trustee just having to provide 32-days notice to withdraw money. They also get one penalty free withdraw a year if the client decides they desperately need some money."
In winning the £400m, Fitch said Investec has been helped by the fact the UK Trustee Act 2000 has formalised the responsibility of trustees to gain the best investment return for settlors and beneficiaries given the level of risk they want to take. This has been adopted as standard practice by many offshore trust companies. "Trustees are more interested in cash management now because of their fear of facing legal action by beneficiaries," said Fitch.
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