International trust executives are to convene in Amsterdam in November to discuss a training program for maintaining professional standards as the field expands.
Their organization, the International Trust Companies Association, was formed in Bermuda this summer.
The group-whose 17 member companies include those owned by Bank of Bermuda, Citicorp, Credit Suisse, Meespierson, Royal Bank of Canada, and Swiss Bank Corp.-is led by chairman Terence A. Todman, who is the chief fiduciary executive of Chase Manhattan Corp. "Anytime any business grows," Mr. Todman said, "there is the risk that new entrants see opportunities without understanding fully the responsibilities they have toward clients and the marketplace."
Several factors are spurring the growth of the international trust business, said Peter Marshall, the director of offshore and international mutual funds practice at Ernst & Young, New York.
Mr. Marshall said private bankers are getting more clients who "may be from one country and work in another, and retire in yet another"- circumstances that lead to complex estate plans.
For those living in countries with highly restrictive trust laws-or none at all-offshore jurisdictions can afford people greater flexibility with estate planning, Mr. Marshall said.
In addition to estate planning-oriented trusts, he said, offshore trusts increasingly are used for portfolios similar to the unit trusts of the United Kingdom or for complex corporate finance issues.
"On the bad side, you can think of drug smuggling, money laundering, racketeering, tax evasion, etc.," Mr. Marshall said. "That is why professional standards make sense."
The trade group does not aspire to be a self-regulatory body, Mr. Todman said. Instead, it plans to foster competence among newcomers.
"At this point it's educational. We don't see ourselves as a policing organization, but really rather as an educational and communicating organization," Mr. Todman said.
Members of the association said together they seek to create a dialogue with banking regulators worldwide, rather than leave trust professionals in various jurisdictions to speak for themselves.
The fledgling organization plans to encourage broader trade associations-such as the American Institute of Bankers and the Association of Bankers in the United Kingdom-to make a place for international trust education on their programs, said Daniel Haase, a group member who is senior vice president in international private banking at BankAmerica Corp.
"There are all kinds of entrepreneurs putting together educational programs; we want to make sure it's worthwhile," Mr. Haase said. "What we're going to do is like a Good Housekeeping seal of approval."
