PASADENA, Calif. – Nearly two years in the making, Wescom Credit Union has launched a multi-layered program that leaves no stone unturned in the trust services arena.

On June 1, the $3 billion credit union launched Wescom Trust Services through its subsidiary, Wescom Financial Services. Working with a WFS financial advisor, members will be able to set up a trust that meets their financial objectives. As a result, members will be able to save on estate taxes, minimize probate, avoid guardianship, provide asset management and assure personal wishes are carried out in the future, the credit union said. There are four components to Wescom Trust Services: Education: Here, members can learn more about trust and estate planning at www.wescomtrustservices.com with information about the various types of trusts and determine how much income their retirement savings may provide in retirement; Establishing a Trust: WTS provides a list of attorneys in the communities it serves who can help set up various types of trusts. Once the member has met with an attorney and a trust has been created, the WFS financial advisor will help to fund the trust by moving the member's financial assets into the name of the trust; Serving as Trustee: For members who need a corporate trustee, Wescom Financial Services has partnered with MEMBERS Trust Co. WFS financial advisors have been trained as trust liaison officers and are available to talk with members about their trust and estate planning needs; Wealth Management: As a registered investment advisor, Wescom Financial Services can help members grow, protect and preserve their assets through the various stages of their lives. “The starting point for members is learning what they can do” with trusts, said Keith Pipes, president, Wescom Financial Services. “Wescom Trust Services is an important program for our members who are seeking sound advice on how to develop a trust that fits their financial needs and protects their assets.” About two years ago, the credit union recognized that trust services would be essential to its members, especially those that were getting older, Pipes said. Wescom was one of several early investors in MEMBERS Trust, founded by $5.1 billion Suncoast Schools Federal Credit Union and owned by several credit unions and CUNA Mutual Insurance Society. Initially, Wescom did an exhaustive search to acquire its own trust company, but found that most were either owned by very big banks or the smaller, independent firms were “hard to find,” Pipes recalled. Fast forward, Wescom had an advantage with its trust services launch through an already developed pool of $500 million in investable assets to potentially draw from. “We saw that if we didn't offer trust services, we ran the risk of members taking their funds elsewhere, particularly to banks,” Pipes said. As the case with most credit unions that offer trust services, WTS will cater to members with assets ranging between $100,000 and $1 million, “a segment of the market that bigger banks tend to ignore,” Pipes pointed out. While WTS has the ability to serve nonmembers, Pipes said the initial focus will be towards current members. He anticipates that much of the new division's activity will occur with education and establishing a trust-funding a trust is one step that many people unfortunately skip. As a result, any prior document set-ups are deemed “worthless,” Pipes said. In California, for instance, a very important step is making sure a home is under the trust, which can circumvent the probate process if the trust owner dies. Meanwhile, Wescom was able to launch its trust services division without a lot of upfront costs, Pipes said. It didn't have to hire a trust officer, which can be costly, but something that might be considered down the road, he added. Instead, it will tap into its existing trust liaison officers and financial advisors. Pipes said value will be derived from a number of areas. “If you were to focus exclusively on trust management or serving as a corporate trustee, that break-even point might be extended out beyond five years,” Pipes said. “In helping members fund trusts, that's an opportunity for us to talk to members about retirement planning, portfolio management and to build business on the investment side.” Quite frankly, the credit union industry is moving at a snail's pace when it comes to trust services and there have been a few notable shutdowns either due to lack of member interest or an inability to sustain growth. Pipes is convinced that collaboration in this area is one of the keys to success. “It would be hard to start an entire trusts division from scratch,” he said. “You would have to be very selective in the services you offer. Collaborating with several partners, the strategy to sustain growth has a lot of potential. That's what makes credit unions different from banks. You would never hear about a bunch of banks getting together to offer trust services.”

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