private client services … · the investment policy statement outlines the portfolio’s building...
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Helping preserve, grow, and transfer wealth to the people and causes you care about
Private Client ServicesHelping you plan now with confi dence in the future
© 2016 Massachusetts Mutual Life Insurance Company, Springfi eld, MA 01111-0001. All rights reserved. www.massmutual.com. MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affi liated companies and sales representatives.
TC7017 516 C:201804-383
The MassMutual Trust Company, FSB is a federal savings bank chartered by the Offi ce of the Comptroller of the Currency to provide discretionary and nondiscretionary trust and fi duciary services in all states. Our business activity is limited to providing trust and fi duciary services. The MassMutual Trust Company is a wholly owned subsidiary of Massachusetts Life Insurance Company.
You’ve worked hard to achieve success, and now your fi nances 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 and trust services – all while adhering to one of the highest standards of fi nancial responsibility, called fi duciary care.
The MassMutual Trust Company, FSB, offers an array of personalized services, delivered by a team of highly qualifi ed professionals who work with your fi nancial professional. Our professional team helps you provide fi nancial security for you and your family. And, as a fi duciary, we always act with your best interests in mind.
Contents 1 | Personalized services delivered
by an experienced team
2 | Disciplined investment philosophy and process
4 | Fiduciary care: The standard of care you deserve
5 | Trusts for your specifi c needs
6 | Your choice of trustee
7 | Individual or professional trustee?
8 | Start a discussion with us today.
Showing Pocket Position
1
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 the MassMutual Trust Company partners with MassMutual financial professionals 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.
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Disciplined investment philosophy and process
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.
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.
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.
4 Monitor and adjustAllocations are monitored on an ongoing basis. As your needs and market conditions change, specific investments can be adjusted periodically to help manage risk.
3 Investment policy statementOur investment team then reviews and documents an investment strategy specific to your needs.
2 Asset allocationNext, we implement a strategic asset allocation with diversification among asset classes and long-term and time-tested investment strategies.
1 Client profileOur investment approach begins with an understanding of your individual investment objectives, risk tolerance, time horizon, tax sensitivity, income and liquidity needs.
3
Ongoing investment oversight
MassMutual Trust Company 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.
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
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.
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Fiduciary care: The standard of care you deserve
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.
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 the MassMutual Trust Company 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.
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.
· The MassMutual Trust Company chooses to use non-proprietary investments to avoid potential conflicts of interest.
· The MassMutual Trust Company 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.
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The MassMutual Trust Company 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 below briefly outlines the different types of trusts
available to you through the MassMutual Trust Company.
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 should 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
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.
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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
The MassMutual Trust Company.
The MassMutual Trust Company 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 responsi-
bilities 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 Company to act as their agent. Critical and
important responsibilities are delegated to us so that
the trustee feels confident that fiduciary responsi-
bilities and investment management activities are
managed appropriately and in accordance with the
trust document.
Your choice of trustee
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Speak with your MassMutual agent for more information about The MassMutual Trust Company and our personalized investment and trust services – all with your best interests in mind.
Individual acting as trustee (a family member or friend)
Professional trustee (MM 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
Individual or professional trustee?
8
Start a discussion with us today.
For more information about the services offered by the MassMutual Trust Company, contact your MassMutual Agent or the MassMutual Trust Company toll-free at 1-888-894-5354 or via e-mail at [email protected].
© 2016 Massachusetts Mutual Life Insurance Company, Springfi eld, MA 01111-0001. All rights reserved. www.massmutual.com. MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affi liated companies and sales representatives.
TC7017 516 C:201804-383
The MassMutual Trust Company, FSB is a federal savings bank chartered by the Offi ce of the Comptroller of the Currency to provide discretionary and nondiscretionary trust and fi duciary services in all states. Our business activity is limited to providing trust and fi duciary services. The MassMutual Trust Company is a wholly owned subsidiary of Massachusetts Life Insurance Company.