California Direct Trust Act Survey Report

In November 2023, California became the 17th state to enact a version of the Uniform Directed Trust Act. In anticipation of the Act becoming law, Strategic Advisory Consulting Group surveyed trust and investment services providers (banks, RIAs, and brokerage firms). The survey captured service providers’ views about how the Act will impact their business.
Key survey findings include:

– More than half of respondents (57%) believe that the capability for directed trustees to separate trust administration duties from investment management duties will have a positive impact on their business in California.

– Nearly two-thirds (64%) of respondents anticipate the Act will have a positive impact on their firm’s new business development activities.

-Sixty-four percent of respondents believe financial advisors (and/or wealth advisors) at their firm will promote services as an investment advisor to directed trustees.

– Sixty-two percent of respondents currently offer trustee services in California and will continue to do so under the new law; 15% of current trustees surveyed plan to discontinue offering this service under the new law, while 8% of respondents do not currently offer trustee services, but plan on doing so in the future.

– Forty-three percent of respondents believe that offering either directed trustee services or investment management services to directed trustees under the Act will have a positive impact on the way their firm is perceived in the marketplace as a wealth management services provider of choice.

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