Tips for a Successful Fiduciary Audit/Risk Assessment
A fiduciary audit or “risk assessment” can be a useful tool to help you assess your fiduciary processes/policies, while ensuring your trust portfolio risk is minimized. Your audit provider should be a consultative and constructive team member, but also proactive and collaborative! Besides checking the audit box, they should be bringing you upcoming regulatory trends, ideas to be more efficient, and sharing valuable best practices. Keep reading to learn a few key tips for a successful fiduciary audit.
Experience and Being Proactive Matters!
Auditors come in all shape and sizes. You may have someone who fully understands your business, and then next year, someone new is trained and assigned to you. They spend half the time learning about your business, just in time to finish up the audit that looks just like last year. Sound familiar?
Solution - You need a partner that will not only understand your business and can relate to the day-to-day fiduciary functions, but can also take it a step further bringing you VALUE! Want some examples?
Ask these questions to properly assess your audit partner’s capabilities:
Has the assigned audit team EVER administered trust accounts or managed fiduciary administration, compliance, and/or operations?
Are they “in the loop” on fiduciary regulatory matters, upcoming changes, and directly hear the latest trends?
How often are they speaking at fiduciary trade shows or attending industry conferences? What topics are they experts on?
Are they capable of helping you assess your fiduciary risk and providing industry best practices to save you time and maximize your resources?
Do they know (and have relationships with) industry vendors/providers that might be needed in the future - and can they make those introductions if needed?
Leverage Industry Best Practices
Simply telling you to “enhance your AML/BSA policy” or “tightening up your pre-acceptance process for trusts” does not provide you with exact options. You need solutions that will work for you. Your fiduciary audit partner should be able to suggest specific ideas to solve your business issues and eliminate your pain points. This can only happen if your fiduciary audit partner has directly experienced it and is plugged into the industry – knowing what others are doing.
A few common trends that fiduciary organizations want to know are:
What is everyone doing about digital assets within fiduciary accounts (especially estates)?
How are trustees effectively managing unique assets and what are the latest trends?
What is going on with the Corporate Transparency Act and the impact on business ownership rules?
What other fiduciary risks should we be assessing?
The answers lie with a fiduciary expert that is dedicated and embedded within the fiduciary industry. There are conferences that can be attended and associations you can align with – make sure you are plugged in to leverage the latest best practices (and your fiduciary audit partner should be too).
More than an Auditor
Lastly, your auditor should be more than a provider. They should be a PARTNER which means they….
Are vested and have a relationship with you
Have shared responsibilities and risks
Need to be proactive and “all in & fully committed” to the fiduciary industry
Conclusion
That’s it! This process is a journey and takes time, but through prioritization every step in the right direction counts!
If you have any questions or comments, reach out at patrick.alyward@trustworthyconsultants.com
