| It is important to
understand
that not all banks will offer all or even any of these 'Specialized
Products
and Services'. The decision to offer the services covered in this
section
are based on a number of factors - including the size of the
organization
- the marketplace it serves and competitors and their services. Most of
these services are expensive initially to offer and make take years to
make profitable. They also require an expertise - both education and
experience
- that not every bank can afford. Further - If your bank offer's these
services - then you may be quite familiar with them - if your bank
doesn't
offer - you might well be less well informed.
Banks chose to offer - or not offer - these
products based
on their decisions that matches additional bank profits and client
services
as an offset to the additional risk inherent to these products.
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| Trust
Departments |
As the name implies
requires
TRUST. Trusts - are a legal entity that is formed for some particular
purpose
that the Grantor (creator of
the trust) has in mind - that he/she can't
or doesn't want to handle. They place the responsibility of
administering
the trust on the Bank, Trustee,
(not an individual) but the Bank - because they trust
the Bank. to carry out their instructions in the trust document for the
benefit of the Beneficiary.
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| |
This is not the
place to get
deeply involved with Trusts - but suffice it to say that they can
involve
a persons life work - an estate or more than one - and can be valued at
a few hundred thousand or many millions of dollars. It is clear
to see, that because
of the amount of money involved with a trust - that the administration
of that trust is an area that requires the highest of ethical standards. |
| |
Trust managers
have a FIDUCIARY
responsibility to the bank's clients. A fiduciary is a
person or institution
in whom you have placed trust and confidence. In this case it is the
bank
and it's Trust officers - whom the client entrusts with their life's
estate.
The Trust officers - are not only responsible
for maintaining
the clients estates - they are also responsible for the growth of those
assets. This often involves investing in the Stock Market. This is a
long term way of providing a hedge against inflation. On the other
hand - since there is no guarantee that any investment will make money
- there is a chance of loss - and perhaps significant. Since the Trust
officers
are responsible for making these investments - they are also held
accountable to make 'prudent'
investments - remembering that they are not investing their own money -
but that of the bank's clients'.
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| Brokerage Services |
Brokerage - is the function of
acting as
a client's agent for the purchase and sale of investment products.
Investment
products include Stocks, Bonds, Mutual Funds, REIT (Real Estate
Investment
Trusts) - and other investment products.
|
| |
Financial institutions must be careful to
adequately disclose that investment products are:
Not FDIC Insured, Not Guaranteed by the Institution or Government, and
May Lose Principal!!!
|
Financial
Planning
|
Financial Planning is the key to
living your chosen lifestyle in retirement.
|
| |
|
| Safe Deposit |
This is a service that is offered
by most
banks - but not necessarily at all locations (particularly branch
offices.
The liability associated with Safe Deposit Boxes is one of the more
challenging
products that a bank can offer - in that - unlike ALL other services -
the bank and/or bank employee has absolutely NO idea of the value of
the
objects stored in the Safe Deposit Box. Further, since there is no
FDIC/NCUA
insurance for what is stored - any loss might well cause great loss -
or
lengthy litigation.
If there is something missing from a Safe
Deposit box
- or if even a boxholder alleges a loss - the bank must be able to
prove
that their procedures would make it impossible for someone to gain
access
to the clients box. It becomes an issue of 'my word - against the
bank's
word'.
|
| International |
Most of us are fairly familiar
with the rules
and regulations - and customs of business in the United States. To
often,
however, we have the mistaken impression that those same rules apply to
other nations. Well, they DON'T. Regulations and customs of other
countries
are NOT based on ours. For example - the Constitution of the United
States
provides, among other things, that a person is "innocent of a crime
until
proven guilty - and that guilt must be proven "beyond a
reasonable doubt".
This is NOT true of many other countries -
where the accused
is 'guilty - unless they can prove themselves innocent - and often the
guilt is based on a majority vote.
|
| Insurance Products |
The Gramm Leach Bliley Act of
1999 allowed banks to own insurance agencies on an unrestricted basis.
As with other products added to the financial institutions menu in
resent years, this assisted the banking industry in meeting customer
needs and providing for additonal 'one stop' shopping
for customers. |
| It is very important
to know
understand that NONE of the products or services listed above are
subject
to FDIC/NCUA insurance of accounts. The bank accepts tremendous
additional
financial liability by offering these products - since they alone are
responsible.
Additionally, the actions of individual employees in these areas - may
place them in a position of personal financial and legal liabilities. |
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Session Internet Resources
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| Comptroller
of the Currency |