Issue 7
Aug 13, 2007
Hi :
In this issue:
ITA Annual Conference - Gear Up For Success
Joint Accounts
Working for Seniors
Top Five Senior Scams
Add Value By Partnering With an Investment Sub-Advisor
Notice & Access - Alternative Method for Proxy Distribution
ITA Newsletter Subscription
ITA Annual Conference - Gear Up For Success Gain the knowledge you need to remain a leader in the trust profession. With changing regulations, an unsure economy and the increasing need to stay current, the Iowa Trust Association is proud to offer the 2007 Annual Conference. This year's conference features noted industry speaker Eugene Maloney from Federated Investors. Mr. Maloney will be on hand to present a regulatory update and discuss fiduciary responsibility. Another keynote session is from Dr. Ron Caskey talking about how to become In'Credible' with Seniors. Dr. Caskey's presentation focuses on the aging population and what that means for those who advise them. Back from past conferences ABA's Sally Miller will present a Washington Update and talk about recent proposed and pending legislation. Also, Seamus Smyth, Goldman Sachs Economist will present a session on current economic trends in the trust industry. Other topics covered include generation skipping tax, asset allocation, trust compliance, and advanced planning for IRAs. There are special sessions on Oct. 11 for Operations personnel. Encourage your operations staff to attend! Continuing education credit hours for CLE and CFP have been applied for. See the ITA This type of account is usually NOT APPROPRIATE when the intention is to allow someone else to sign your checks or help with your affairs. Remember hitchhiking in the 70's? And the days when people did business on a handshake? Would you do either of those today? Probably not. If so, you are among the millions of Americans whose trust in the goodwill and honesty of their fellow citizens has been steadily declining. In 1960, surveys reported that 58 percent of Americans believed "most people" could be trusted. In 1993, that percentage had fallen to 37 percent and by 2000 it had sunk to 34 percent. How did we get to this point? Since the turn of the century, our trust in people, professions and institutions has been eroding. In 1918, the news that eight Chicago White Sox players threw the World Series rocked the nation. Forty years later, Americans shook their heads when Columbia University professor, Charles Van Doren, revealed that the NBC quiz show "Twenty One" was fixed. The situation hasn't improved much in the past fifty years. New names in the hall of shame include Washington Post Pulitzer-prize winner, Janet Cooke, religious leader, Jim Bakker, and corporate giants such as Michael Milken and Kenneth Lay, among others. Just this past summer, a Harris Poll telephone survey measured public perceptions of 22 professions and occupations. Sadly, the only occupations perceived to have "very great" prestige were firemen, doctors, scientists, nurses and teachers. Worse yet, professionals who serve senior citizens such as stockbrokers, real estate brokers, accountants, bankers, business executives and lawyers, received the lowest rankings. The most highly ranked professions in the survey were not linked to income or celebrity. What seemed to matter most was that these professions were perceived as helping people in need. On the other hand, it could argued that stockbrokers, real estate brokers, accountants, bankers, business executives and lawyers also help those in need. Why then, didn't the public draw the same conclusion about these professions? One reason may be the vast amount of recent news coverage of corporate wrongdoing, lack of ethics, fiscal mismanagement and questionable deals. Another may be the intangible nature of trust itself. When you drop your clothes off at a dry cleaner, for example, you trust your clothes will be cleaned and returned to you in a timely fashion. If that happens, your trust level increases. If your clothes come back late, lost or missing buttons, your trust level disappears completely. Trust is hard to give in simple everyday transactions and even more difficult when bigger issues are involved. When a senior is looking for someone to provide professional services, there is infinitely more at stake, emotionally and financially. Having to make a major decision creates a great deal of insecurity and anxiety and beyond that is the pervasive fear of making a bad choice. In times like this, when the customer feels vulnerable, trust is imperative, says business expert, Leonard L. Berry. 1.Figure out why people should trust you. Take a good look at your motivation for being in business. Be open about who you are, specific and sincere about what it is you offer and why. Knowledge about your clients - individually and as a group-- is critically important. Is your approach to them age-appropriate? Does it reflect a deeper knowledge of, for example, seniors, or merely a superficial desire to have them as clients? 2. Keep appointments, be on time and return calls and messages. If you are too busy or tied up in meetings, leave messages saying exactly when you will get back with your client. Reassure your clients that they matter to you. 3. Communicate frequently. Listen and learn from your clients. Spend time getting to know them, their needs and concerns before you proceed with business matters. Whatever their emotional state, cautious or confident, it's important to them that you understand what they're trying to tell you and understand how they feel about the services you want to provide. 4. Share your expertise. A good counselor educates rather than dictates. The more you explain, and the more knowledgeable clients become, the more competent you will be perceived. 5. Prepare a plan. Actions speak louder than words. Clearly state your goals and objectives, outline responsibilities and who how you will be held accountable. 6. Review results on a regular basis. Share successes, be honest about failures and explain how you plan to improve. 7. Express genuine interest in your clients. Small acts of kindness demonstrate your concern for their well-being. Caring is a comfort that says that you will protect their interest as well as yours and is the centerpiece of a lasting relationship. Once you've laid the foundation for trust, ask your clients to rate your performance. If they answer a resounding 'yes' to the following questions, you're well on your way to forging a successful, long-term relationship. 1. Did they get the outcome they expected? Earning and winning your clients' trust is an honorable and profitable way to do business. Customer service expert, Rom Zemke, says it best: "Trust is the platinum standard of customer service. It is the glue that keeps customers coming back." Home improvement frauds. Criminals will knock on a senior's door offering to fix their driveway, then paint it black and charge the senior $3,000. Or seniors are asked to pay up front to have their roof fixed never to see their alleged repairman again. One 81-year-old woman who was caring for her husband with Alzheimer's disease paid a criminal $800,000 and drained her savings to have repairs done on her home, according to the National Association of Triads, Inc. Phishing schemes. Seniors receive a call from someone claming to represent a bank or other reputable financial institution. They're warned that their financial information or credit card has been compromised and are asked to verify their bank account number or call an 800 number where they're asked for their personal financial information. Internet fraud. Seniors, unfamiliar with how to use the Internet, can unwittingly give their credit card number to a scammer. Identity theft. Seniors who give up their birth date and Social Security number can open up their entire financial history to a thief. Subject to the supervision of the trust advisor, the investment sub-advisor directs and manages the investment of trust/agency discretionary assets in accordance with the designated investment objectives, policies and restrictions set forth by the trust. The investment sub-advisor also creates and furnishes appropriate information and reporting to the advisor. The partnership between the sub-advisor and financial institution can be critical to ensure trust assets are invested in a fashion that meets the financial objectives of the trust, mitigates risk and provides cash flow and investment return to effectively maintain and support the ongoing needs of the trust. A strong investment sub-advisor will provide a team of highly specialized portfolio managers, research analysts, traders and compliance and administration specialists. This team will provide expertise in the financial markets, assist in the creation of trust investment objectives and investment policy statements, construct a well-diversified investment portfolio, and provide time-proven, highly disciplined investment strategies. The sub-advisor should also possess a high degree of flexibility to effectively recognize the dynamics of the marketplace and evolving investment needs of the trust, adjusting the portfolio accordingly. By utilizing an investment sub-advisor, the bank may continue with efforts for trust department growth while also focusing its resources on more cost-effective areas of expertise, including trust administration and management, fiduciary responsibilities and compliance, reporting, and relationship management. The bank can avoid high start-up costs and the large ongoing overhead associated with recruiting, hiring, developing and managing an internal investment management team. This partnership can be cost-effective and turn into a profit center for the bank. In selecting a sub-advisor, the bank should look for an experienced investment manager with a strong reputation for specializing in partnering and sub-advising for banks, bank trust departments and trust companies. Separate account management is also critical to ensure investment portfolios can be customized to meet the needs of each trust. The investment manager should incorporate prudent investor principals, broad diversification and other risk management tools that result in a disciplined investment process developed for the requirements of the trust client. Partnering with a strong investment sub-advisor who specializes in separate account management can provide a strong strategic alliance for your bank, bank trust department or trust company. Notice and Access allows issuers to mail a Notice of Internet Availability of Proxy Materials to shareowners instead of a traditional proxy package (proxy statement, annual report, and voting form). The Notice directs shareholders to a website to Access the materials and vote their shares online, and also provides instructions for requesting a paper set of materials. This new rule is intended to significantly reduce annual meeting costs for issuers due to lower printing and postage costs. Notice and Access does not replace the current proxy distribution process; it simply gives issuers a choice on how they would like to communicate with shareholders. What if I still want to receive paper materials? Impact on trust departments Broadridge Financial Solutions, Inc. (formerly ADP Investor Communication Services), the industry's leading provider of proxy and related shareholder communications, engaged in its largest development initiative to date, to be fully prepared for the July 1st launch of the SEC Rule. The enhancements include: a carefully designed Notice, instituting an SEC compliant fulfillment solution, meeting all SEC requirements and all USPS specs for the lowest possible postage costs, the creation of a "landing page" to guide shareowners to internet sites to view/request paper materials and vote their proxies, along with the ability to provide shareholders with a complete set of proxy materials for up to a year after the meeting date. These enhancements make Notice and Access a seamless change for shareholders and clients. Broadridge also provides a cost-free proxy service to banks and trust companies to help streamline the entire proxy process. 
Gear up for Success at the annual Iowa Trust Association Conference. There is still time to register! The event will be October 11-12 at the Marriott Hotel in West Des Moines. This year's event will be two days and will feature sessions on top trust issues. Exhibitors will also be on hand to display and discuss their products and services for trust departments.
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Joint Accounts
With input and suggestions from the Trust & Probate section members of the Iowa Bar Association, this is a handout Iowa Savings Bank prepared for their staff. It summarizes the risks run by individuals using joint accounts with someone who is not their spouse. If a customer requests a joint account (whether it is checking, CD, savings, etc.), customer service representatives and officers ask if they are aware of these potential problems for this type of account. Special thanks to Mike Nelson for sharing.
An account titled as "Joint Tenants with Right of Survivorship" (abbreviated as JTWROS) is very different than an account in just one name. Before opening a joint account with someone who is not your spouse, you should know that:
This type of account usually is appropriate for a husband and wife.
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Working for Seniors
By Ed Pittock, CSA, President, Society of Certified Senior Advisors
Trust Me
All of which raises the question, how do you create and measure trust? Gaining trust is a process that happens over time. It doesn't happen overnight but grows slowly after a succession of positive experiences. To lay the foundation for a trusting relationship start by following these steps.
2. Was the process was painless?
3. Did I perform as promised?
4. Were they treated ethically?
5. Were their unique wishes, needs and concerns were acknowledged?
6. Were their best interests were placed ahead of the company's convenience?
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Top Five Senior Scams
Following, from the National Association of Triads, Inc., an 18-year-old organization that is part of the National Sheriffs' Association, and Home Instead Senior Care, are the top five senior scams and how they work:Prizes and sweepstakes scams. Seniors are told they've won a sweepstakes and all they need to do is send a check to cover the taxes. Or, they receive a fake check for $5,000 and are encouraged to deposit the money and send back $2,000 to cover the taxes. By the time it's determined that these checks, which often come from an overseas bank, are worthless, the senior has lost his or her money. Magazine sale scams, where seniors order magazine subscriptions that never show up, also are prevalent.
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Add Value By Partnering With an Investment Sub-Advisor
A strategic partnership between your bank, bank trust department or trust company and an investment management sub-advisor can be highly beneficial and effective. A partnership of this nature can result in the creation and maintenance of investment portfolios that meet the investment objectives for trusts, trust clients and agency relationships as well as provide additional growth opportunities for the trust department. 
Brian Rolland, CPA, CMA, CTP, is Vice President and Institutional Consultant for WB Capital Management. He is an integral member of the Sales Team and focuses his efforts on institutional clients. Brian has earned the following designations during his career in investments: Certified Public Accountant (CPA), Certified Managerial Accountant (CMA), and Certified Treasury Professional (CTP). Prior to joining WB Capital Management Inc. Brian was the Treasurer/Vice President for AEGON USA Investment Management, LLC.
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Notice & Access - Alternative Method for Proxy Distribution
What is Notice and Access?
Beginning July 1, 2007, corporate issuers were given a choice on how proxy materials may be distributed to their shareholders. The basis for this change was the SEC Release 34-55146 - Internet Availability of Proxy Materials (www.sec.gov/rules/final/2007/34-55146.pdf), known as "Notice and Access".
The Notice sent to shareholders must include information on how to request a complete set of proxy materials in paper format or by e-mail. Shareholders may request this via toll-free telephone, internet site, or via e-mail for up to one year after the meeting date. The shareholder can elect to receive paper materials for just one meeting, or for all meetings going forward. If the shareholder does not opt out of Notice and Access, the default will be to receive a Notice, view the materials, and vote online.
The new ruling can pose a potential challenge to trust departments that do not currently use a proxy service. Ordering and forwarding materials to customers that vote their own proxies may prove cumbersome. For departments that vote on behalf of their customers, little will change. Trust officers will continue to receive materials for those issuers that have decided not to take advantage of Notice and Access and receive a Notice for those that did adopt the Rule.
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