Changing fiduciary service providers need not be complicated and can offer significant benefits. 

In this article, Daniel Channing, Group Head of Private Client, and Rob Lucas, Head of Corporate, explain why a move might be easier than clients expect — especially if frustrations with the current provider are mounting.

Identifying service failures

In many of the scenarios we come across, clients are already experiencing frustrations with their existing service provider. However, these frustrations are sometimes mistakenly accepted as normal. The issues are often disguised as regulatory complexity, temporary staffing issues or general market conditions.

Once such problems begin to appear, they rarely improve on their own. In fact, waiting for things to get better often only increases the risk of a significant error arising or an issue being left unaddressed. If any one of the below (or a combination of several) are apparent, then it is likely be a point where it is time to consider a move:

  • Slow responses, missed deadlines or recurring basic errors;
  • The amount of time spent prompting, reviewing and amending deliverables which you had engaged the service provider to manage proactively;
  • An underlying lack of transparency on fees and / or continually unexpected costs;
  • Staff that are hard or impossible to get hold of or rarely remain involved in the relationship for any meaningful period of time (often resetting the relationship entirely);
  • A clear misalignment between the client’s objectives and those of the service provider; and
  • Poor technology or lack of investment in systems to enhance service provision.

Is there a right window to move

A common misconception is that you need to wait for a quiet period in the activity within the structure to orchestrate a move. If the transfer process is well planned and properly project managed, you can set the timing of a move when it is right or necessary for you. 

Proper project management means the chosen new service provider taking the lead on the process; mapping out all of the transfer steps and requirements, scheduling regular all-parties’ calls, helping to agree the migration cut off periods and working closely with the outgoing administrator to define accountability on responsibilities, deliverables and timings clearly. 

Following such a carefully planned and managed process can provide total continuity in the operation of the structure meaning a transfer can occur when the time is right for the client and their advisors. Ideally, this will occur before any of the issues identified above are set in perpetuity.

How much does it cost to move

In some instances, there can be a psychological barrier for many clients to move, even when it is recognised it is right to do so, due to a concern over cost. It is true that the outgoing service provider will often wish to recover their costs on the transfer and the incoming provider will likely seek to charge some (but possibly not all) of its costs. 

The key to eliminating this aspect as a permanent and insurmountable barrier is to make the transfer process as efficient as possible. The costs can be as carefully planned as the transfer deliverables and steps themselves. With the certainty that costs will be tightly controlled within a pre-defined budget, the transfer can be triggered safe in that knowledge. 

Important transfer deliverables  

Typically, the new service provider will fully and carefully project manage a transfer including helping to set out all of the deliverables, delivery timelines and responsibilities for all parties. 

Some critical considerations to include in that mapping exercise are to identify the client data to migrate / records to hand over, ensure all IT application details supporting the relationship / that belong to the structure are shared, and to specify responsibilities and deadlines for all filing and reporting obligations relating to the prior and current year and anticipating those that occur whilst the transfer is in flight.

It is also important to review existing contractual terms early to identify the necessary break mechanisms and prescribed notice or defined hand over periods. These can then be used to plan overall desired timelines.

How to identify a potential new provider

Choosing the replacement service provider is a critical component of the process and often a client’s trusted advisor network will be able to support them to identify potential replacements. There are then certain key aspects that it is critical to explore to ensure the right partner is then selected. These include:

  • How the business sets about retaining staff;
  • How the team that will manage the relationship is comprised; 
  • The businesses’ track record of orchestrating the transfer of structures into its administration effectively;
  • Transparency and clarity on pricing;
  • A willingness to share testimonials from other clients openly;
  • Clarity around the service provider’s strengths but also where it recognises it will work in partnership with others (with more specialist expertise) (i.e. purporting to be a ‘one-stop-shop’ rarely provides excellence in all the areas described as covered); and
  • The relationship and rapport with the new client relationship lead.

Conclusion

No client should feel under-serviced or trapped in a relationship with their current service provider. A move or transfer of service provider can often be a carefully and efficiently driven process. Most importantly this can be orchestrated under a timeline suited to the client and, if the process is well managed, it can ensure full continuity of operation for the structure and its activities and a sheltering of the client from excessive costs or input on their part.

Whitmill has a proven track record of project managing the transfer process outlined above and provides full-service trust, corporate and fund services. To find out more about transferring a structure to Whitmill please contact:

Daniel Channing, Group Head of Private Client – daniel@whitmill.com

Rob Lucas, Head of Corporate – rob@whitmill.com