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Know your place

Sometimes I can’t say it any better than another trust professional.The following from Lindsay Pope highlights the too-often overlooked issues that can arise as professional advisors and professional trustees lose sight of the important demarcations between their roles:

Professional trustee vs professional advisor roles

Professional advisers provide advice to clients.  In an advice relationship, decisions are always for the client to make.  Clients can choose to accept advice, or ignore it.
Often a professional adviser will be asked by their client to take on a professional trustee role.  This can make good sense.  A trusted adviser will often have a good understanding of the client’s business, family and financial affairs.   However, potential problems and conflicts can arise between trustee and advisory roles.   An example would be where a client fails to make the distinction between the advisory role of a professional adviser, and the decision-making role required of a professional trustee.      Trustees have decision making roles.  It’s not an advisory relationship.
Professional trustees come to the trustee table as an ‘equal’ with their co-trustees.     A warning sign for potential problems would be where a ‘client’ wants to remain in control as the decision maker.  Another would be a professional trustee taking a ‘back seat’ approach to their stewardship role.    Trustees need to be sitting in the front seat together with an eye on the road ahead.     There can also be a conflict between the requirements of advisory and decision making roles.  This potential for conflict needs to be recognised, discussed and managed in a transparent way.     In some cases a ‘client’ will decide it’s more important for their professional advisor to remain solely an adviser.  In other cases, they’ll be comfortable with the same person undertaking both roles.   For professional trustees wishing to reset the terms of their trustee appointment, it starts with a conversation on what’s important.
Trust good practice.

Regards Lindsay
PS:  Professional trustees often tell me that investment decisions are one of the hardest decisions they have to manage.  I’m running a webinar in association with CCH to help professional trustees sharpen their investment decision-making skills at 2.30 pm on August 5th.  You can get the details here.


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