The perfect match: Finding the right trustee
5 June 2023
Executive Director, Marina Mauger, explores what clients should consider when searching for a suitable trustee and the importance of expertise, trust and collaboration.
In Guernsey, you can find qualified, reputable service providers who will act prudently and compliantly to manage your trust affairs. Several firms will tick all the boxes in terms of offering, fees, and location – but choosing the right trustee is not just a box-ticking exercise. Your trust affairs are often deeply tied to family, to generations of hard work past, present and future. Choosing the right trustee takes time and requires careful consideration.
A deep understanding of trust law, governance and the legal and regulatory landscape is vital. This is the expertise that comes with the right qualifications and a wealth of experience.
Are they forward-looking? Your trustee should look to the future to identify new opportunities and innovations, such as AI and sustainability. At HFL, our mission is to future-proof, educate ourselves and ensure expertise is gained.
Are they strategic thinkers who will manage your risk? You need your trustee to have strong thinking skills and the ability to assess and manage risk effectively with a long-term view. We are dealing with an ever-changing world, and preparing for these challenges will see you through turbulent times.
At HFL, we prioritise learning and development with ongoing training programmes.
Building trust through communication
Trustees should always be professional, but managing a trust and estate planning is also highly personal. Therefore, your trustee needs to have both integrity and be worthy of your trust. A trustee's honesty, transparency and ethical conduct are critical for managing the assets they oversee and making decisions.
Inextricably linked to trust are communication and collaboration, as this is how long-term relationships are established and maintained. Trustees need to be effective communicators and collaborators, able to work closely with the settlor and beneficiaries as well as other parties such as investment managers, tax advisers and law firms. Trustees must build strong relationships with these stakeholders and be skilled at navigating complex and challenging situations.
A trustee should never be a 'yes man' who will agree with their client above all else. This is not a responsible relationship. Instead, trustees should have the integrity and expertise to have difficult conversations and explain decisions that the client or beneficiary may not fully agree with. Honesty is crucial and will ultimately lead to a successful relationship and a well-managed trust that achieves its objectives.
Good communication and collaboration will enable strong relationships, thus allowing for a holistic service to be provided to clients best suited to meet their needs and requirements.
Independence and objectivity
Part and parcel of the client/trustee relationship is knowing your trustee can act objectively and give impartial advice and guidance. Trusted impartiality is necessary for good decision-making, with no conflicts of interest that could compromise acting in the beneficiaries' best interests and the trust's long-term objectives. HFL's independence allows us to use the appropriate third parties suited to the client, beneficiaries and the management of the trust's assets.
Availability and compatibility
Your needs, likes and dislikes as a client will also significantly impact the type of relationship you would like with your trustee. It is important to ask yourself – how do I wish to interact with my trustee? When? Can I pick up the phone to them at any time? You might want it to be relatively ad hoc, with an annual meeting to discuss matters, or you may prefer more discussion and guidance.
HFL is unique in this case as it can truly tailor its services. We have experience working with a wide range of clients for whom we establish trusts and similar arrangements for considering their objectives, financial circumstances and family arrangements. Our portfolio of clients includes multiple generations, having created long-lasting relationships which have spanned nearly forty years.
Take your time
Ultimately, choosing the right trustee is a process that should not be rushed. We always recommend meeting with your prospective trustee at least two or three times. Learn about them and their business, its history, ownership structure, their approach to the type of service you require, their staff, compliance processes and their regulatory status. Use this time to identify whether they are the right trustee for you. Taking your time to know you have made the right choice provides yourself and your trustee with the best opportunity for success by developing a strong relationship based on professional expertise, trust and integrity.