Comparison of Bank Trust Department Fees
By Stuart A. Ober, CFE, AIFA®
rust Pricing Analysis Report 2006 by PriceCompare™ provides a valuable database of competitive pricing information of bank trust department fees. This information source provides meaningful industry benchmark and comparative information relating to performance and profitability, competitors and market share, and pricing structures and fees charged. The database is a comprehensive source of fee information garnered from published fee schedules from bank trust departments throughout the United States. The database universe consists of 2,072 fee schedules proved from 439 banks and trust departments.
The database is segmented into four regions for comparative analysis: Midwest, Northeast, Southeast, and West.
The report analyzes the participating organizations size in terms of total trust assets based on "Small" (total trust assets less than $500 million), "Mid-Size" (total trust assets greater than $500 million but less than $5 billion), and "Large" (total trust assets greater than $5 billion). The following chart shows the number of banks and fee schedules included in the study based upon total trust asset size:
As the above chart illustrates, "Small" banks comprise 48.5% of the universe of this study, with "Mid-Size" and "Large" banks constituting 32.4% and 19.1%, respectively. In terms of the number of fee schedules, "Small," "Mid-Size," and "Large" banks formed 46.5%, 30.0%, and 23.5%, respectively, of the universe for the study.
The breakdown of the universe by number of participating organizations and fee schedules per size related to total trust assets is as follows (note that because bank merges have caused a mounting number of branches with schedules, all branches have been excluded from the asset-based analysis):
Of particular interest is the study's analysis of the average basis point values for the universe of trust departments and the size of the market in terms of total trust assets across each account size. This allows one to compare the fees a trust department is charging a trust for its services with a benchmark based on asset size and size of trust department.
As we see, "Small" banks have the lowest average basis point fees across the range of account sizes and the "Large" banks have the highest average basis point fees across the range of account sizes.
The Trust Pricing Analysis report uses colorful graphs and tables to compare and contrast regional and bank size differences in minimum fees, base fees, and portfolio fee quartiles for Personal Trust, Investment Advisory/Management and Personal Custody fee schedules. Also disclosed are the high, low, and average fees. The report includes Retirement Services/Employee Benefit information as well.
Additional information on this report may be found from the author, Stuart Ober.
Stuart A. Ober, CFE, AIFA® serves as a consultant/expert witness in the areas of fiduciary standard of care, due diligence, fraud, suitability, and selling away (845-679-2300 or email@example.com).