Private Client Services. Helping preserve, grow and transfer wealth to the people and causes you care about

Transcription

1 Private Client Services Helping preserve, grow and transfer wealth to the people and causes you care about

2 TABLE OF CONTENTS 1 Personalized services delivered by an experienced team 3 Disciplined investment philosophy and process 5 Fiduciary care: The standard of care you deserve 6 Trusts for your specific needs 8 Your choice of trustee 10 Individual or professional trustee? 11 Start a discussion with us today

3 You ve worked hard to achieve success, and now your finances are more complex and come with additional responsibilities to take care of those who depend on you. You deserve a dedicated professional team that can develop a customized investment plan and provide a variety of personalized client services all while adhering to one of the highest standards of financial responsibility, called fiduciary care. The MassMutual Trust Company (MassMutual Trust) offers an array of personalized services, delivered by a team of highly qualified professionals who work with your advisor. Our professional team helps you provide financial security for you and your family. And, as a fiduciary, we always act with your best interests in mind.

4 Personalized services delivered by an experienced team Building the right relationships can be critical in maintaining financial success and preserving wealth. Through its team of experienced professionals in the areas of trust management, investments, tax regulations, and state laws,¹ MassMutual Trust partners with MassMutual advisors to help clients who want to provide financial security for their families now and for future generations. We deliver high-end concierge services for a variety of needs, including: customized investment strategies, with ongoing oversight, prudent risk management, objectivity, and tax efficiency cash management services and access to secured lending² estate plan execution including legacy planning trust document reviews investment portfolio reviews multi-generational planning and wealth transfer strategies family wealth stewardship, family meetings charitable giving strategies, including donor-advised funds ongoing account administration We become part of your team, working with your existing financial team during the planning process and throughout the life of our relationship with you and your heirs. We employ an extensive discovery process and take the time to listen to your needs, wishes and plans for your legacy. We also help to address any concerns about changing family dynamics such as disability, incapacity, divorce, aging, death and blended family issues. In other words, we take a holistic approach in viewing and evaluating your current situation, in order to design solutions that are specific to your life, hopes and aspirations. ¹ The MassMutual Trust Company, its employees and representatives are not authorized to give tax or legal advice and the information provided is not written or intended as tax or legal advice. Please consult your tax and legal advisors to determine how this information may apply to your own situation. ² Loans and letters of credit provided by US Bank. 1

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6 Disciplined investment philosophy and process Our investment philosophy has grown from our long experience with meeting client objectives in changing market conditions. Because our clients generally have plans that span multiple generations, we apply an investment philosophy and approach that provides a customized solution with prudent risk management. We carefully select only those asset managers whom we believe can deliver the expertise and experience that will help meet your long-term objectives. Then we carefully monitor both the managers and your individualized plan, to ensure they remain aligned with your long-term goals. Our process is centered around your goals We take the time up front to understand what is unique about you. Then we develop a customized investment strategy and document it in an investment policy statement. The investment policy statement outlines the portfolio s building blocks and tries to capture what you told us about yourself your time horizon, your need for income, your risk tolerance, need for liquidity, tax situation and any other unique needs and circumstances. The investment policy statement will include the long-term asset allocation target, the investment strategy, and how the portfolio will be benchmarked and over what time periods. We regularly revisit this statement with you and your financial professional to ensure that we remain aligned with your wealth management objectives. Investment process A four-step investment process brings together your needs with our expertise and discipline to build a comfortable and successful wealth management strategy just for you. 1 CLIENT PROFILE Our investment approach begins with an understanding of your individual investment objectives, risk tolerance, time horizon, tax sensitivity, income and liquidity needs. 2 ASSET ALLOCATION Next, we implement a strategic asset allocation with diversification among asset classes and long-term and time-tested investment strategies. 3

7 3 INVESTMENT POLICY STATEMENT Our investment team then reviews and documents an investment strategy specific to your needs. 4 MONITOR AND ADJUST Allocations are monitored on an ongoing basis. As your needs and market conditions change, specific investments can be adjusted periodically to help manage risk. Prudent risk management Our investment team constructs a prudently well-diversified portfolio for each client, ensuring that there are no concentrations of risk in any one asset class, economic sector or individual security. As conditions change in the economy, the financial markets, or in your own individual circumstances, adjustments are made as needed.³ Ongoing investment oversight MassMutual Trust investment professionals have a thorough, disciplined, and continual due diligence process to ensure sub-advisors continue to meet the needs of our clients. Our ongoing due diligence and investment oversight includes a number of checks and balances, including internal supervision by the Trust Company Investment Committee and Board of Directors. MassMutual Trust remains vigilant in watching for any changes in our sub-advisors investment philosophies, personnel policies, or organizational structures that may have an impact on our clients portfolios. We engage with only those sub-advisors whom we believe can deliver the expertise and experience that will help you meet your long-term objectives. Sub-advisor selection criteria We select investment sub-advisors who share our commitment to service, integrity, quality, discipline, oversight, and governance. Each sub-advisor has an experienced team of portfolio managers with a unique perspective to managing money for the long term and through all types of financial market cycles. We use non-proprietary asset managers, providing an additional layer of objectivity in managing your assets. ³ Asset allocation and diversification do not assure a profit and do not protect against loss in declining markets. All investing is subject to risk, including the possible loss of principal. 4

8 Fiduciary care: The standard of care you deserve Having accumulated higher net worth, you expect and deserve the highest levels of competency, service and care from your financial firm. The fiduciary standard of care is the pinnacle standard in the industry. The fiduciary standard of care is the framework used by MassMutual Trust to build our service model and offer customized solutions so that decisions are made in your best interest. The fiduciary standard Our fiduciary standard means that we have the responsibility to act solely in the best interest of our clients, under circumstances that require the use of reasonable care, skill, prudent judgment and rigorous accountability on a continuing basis. How we provide fiduciary care A fiduciary has a number of responsibilities to consider when acting in your best interest. We construct a portfolio of investments customized to your investment goals, providing a careful analysis to balance risk against return, and diversifying assets to focus on the performance of the entire portfolio. Our responsibility is to monitor and continually adjust the portfolio as economic conditions change. At least once a year, our investment team formally reviews every account to ensure that the portfolio remains consistent with the client s financial goals. We provide full and fair disclosure of all material facts of each account, including a quarterly report of the account s performance. Notably, we choose to use non-proprietary investments in order to avoid even the appearance of any conflict of interest. In addition, we participate in mandated, regular, in-depth reviews by the Office of the Comptroller of the Currency (OCC). Oversight by the OCC is among the most rigorous applied to advisor relationships. What does it mean to be a fiduciary? A fiduciary must act with each client s best interests in mind. Any recommendations must be made in utmost good faith and with full disclosure of all material facts and conflicts of interest. A fiduciary must provide regular reporting of account financial information. MassMutual Trust chooses to use non-proprietary investments to avoid potential conflicts of interest. MassMutual Trust is overseen by the Office of the Comptroller of the Currency (OCC). Oversight by the OCC is among the most rigorous applied to advisor relationships and includes mandated regular in-depth reviews. A fiduciary reviews the portfolio regularly and makes prudent adjustments to match a client s current goals. 5

9 Trusts for your specific needs There are different types of trusts to meet a variety of goals. Trusts are designed to address your personal wishes and maintain control over how your estate is managed, preserved and distributed. MassMutual Trust can help you establish a trust with a dedicated Trust Officer who administers the trust and serves as your primary contact for ongoing trust management and any ad hoc requests or questions you may have. The chart on the following page briefly outlines the different types of trusts available to you through MassMutual Trust. 6

10 What do you want to achieve? What type of trust will get the results you want? What is the benefit/feature of this trust structure? Have a plan in place if I become incapacitated Revocable Living Trust Manage some of life s unforeseen circumstances such as a disability Explain your wishes for your children when you are no longer in the picture You can retain control of the trust and change or have it revoked during your lifetime Trust assets pass directly to beneficiaries without going through probate, which helps eliminate any challenges within an estate and maintains privacy Provide funds for estate settlement; asset and some creditor protection for beneficiaries Irrevocable Trust Pass on assets to family using gifting advantage without going through probate May reduce estate taxes on the appreciation of trust assets An irrevocable trust and its provisions cannot be changed or modified once it is signed Provides beneficiaries with creditor protection Pass on assets to family; leave a legacy for your family Irrevocable Life Insurance Trust Maximize life insurance benefits by providing liquid assets to maintain family lifestyle Removes the life insurance death benefit from the estate, creating a tax-advantaged way to transfer wealth to your loved ones Give to a favorite charity without endangering income to you or your family Charitable Remainder Trust Support your favorite charity Allows you to enjoy an income stream while avoiding capital gains tax Provides an income tax deduction Provide care for a loved one with special needs Special Needs Trust Have peace of mind knowing that a loved one who may not be able to care for her/himself will be cared for The trust is structured to continue the person s eligibility for government programs and benefits Provides for additional lifestyle needs Provide some financial security for your children after your lifetime Trust Under Will (Testamentary Trust) May perform many of the functions of other trusts Does not take effect until your death Creates a trust at death under a will Changes can be made to the trust throughout your lifetime May be subject to public scrutiny as part of probate 7

11 Your choice of trustee One of the most important decisions that clients face when creating a trust is the selection of a trustee. A trustee is required to administer the trust to ensure that your wealth is managed and distributed according to your wishes as presented in the trust document, while keeping your beneficiaries best interests in mind. You have the ability to choose an individual, a professional trustee, or a combination of both for the role of trustee. Trustee responsibilities The overriding responsibility of a trustee is to safeguard the assets of the trust grantor (if living) and for the beneficiaries who will receive them after the grantor dies. Trustees must follow the instructions in the trust document and must fulfill certain duties such as: Invest assets in a prudent (conservative) manner, i.e. in a way that will result in potential reasonable growth with minimum risk. Treat multiple trust beneficiaries impartially (i.e. not favoring one over another), unless the trust allows the trustee to do so. Keep accurate accounting records of assets, liabilities, receipts, disbursements, and income, estate and gift taxes. Record trustee actions and routine trust actions. File tax returns. Report to the beneficiaries and communicate information to relevant parties as the trust requires. Keep personal accounts and assets separate from the trust assets, and ensure that trust assets are used only as intended in the trust document. Individual vs. professional trustees When selecting a trustee, many people consider a trusted family member or a close friend for the role. It is likely that an individual trustee will have a long and close history with the trust beneficiaries. While this can add a helpful element to the relationship, it can also cause critical issues to arise. The chart on the facing page outlines why you may want to consider a professional, corporate trustee, such as MassMutual Trust. 8

12 MassMutual Trust can serve in a variety of roles relating to the responsibilities of the trustee as outlined below. Sole trustee: We assume all administrative responsibilities, investment management decisions, and discretionary distributions in accordance with the terms of the trust document. Co-trustee: We take care of the administrative and investment management responsibilities delegated to us. Discretionary decision-making responsibilities are shared with other co-trustee(s). Successor trustee: We assume trustee responsibilities when the current trustee is no longer willing or able to serve as trustee. Agent for trustee: We take care of the administrative and investment management responsibilities, while all discretionary decision-making responsibilities are handled by the trustee. In this role, a family member or close friend who is trustee hires MassMutual Trust to act as their agent. Critical and important responsibilities are delegated to us so that the trustee feels confident that fiduciary responsibilities and investment management activities are managed appropriately and in accordance with the trust document. 9

13 Individual or professional trustee? Individual acting as trustee (a family member or friend) Professional trustee (MassMutual Trust) Resources May only be able to work part-time May have little to no experience or track record May need to separately employ specialists Has full-time, trained, professional and credentialed staff and specialists Has staff and specialists who have many years of experience administering trust accounts Cost Fees of various other specialists increase overall cost of relationship Offers multiple services at one fee Objectivity May have a conflict of interest due to familial relationships Is an impartial third party Continuity Service may be interrupted by illness, death or disability Service is provided by a wholly-owned subsidiary of MassMutual Life Insurance Company, a financial institution that has been in business for more than 163 years Investment Knowledge May not be experienced in asset management May hold cash uninvested for periods of time, which may dampen long-term performance Substantially experienced in managing all assets including unique assets Reinvests cash daily Communication May communicate infrequently with beneficiaries and may not be able to address complex or emotional issues Is committed to regularly communicating with beneficiaries, answering questions and discussing all issues with sensitivity and objectivity Speak with your MassMutual advisor for more information about The MassMutual Trust Company and our personalized investment and trust services all with your best interests in mind. 10

14 Start a discussion with us today For more information about the services offered by MassMutual Trust, contact your MassMutual advisor or MassMutual Trust toll-free at or via at info@massmutualtrust.com. 11

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16 The MassMutual Trust Company is a federal savings bank and a wholly owned subsidiary of Massachusetts Mutual Life Insurance Company Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA All rights reserved. TC C: