Trustee Disputes and Service Standards: Knowing When to Make a Change
Trustee disputes can arise in a number of ways; poor service or conflicts of interest are just two common examples. If left unresolved, trustee disputes can sometimes result in the removal of the existing trust company provider by the beneficiaries and the settlor.
In this article, we explore how and why trustee disputes happen, why poor client service plays such a central role – and how moving to a new trustee, such as Fiduchi, can restore confidence and control.
How trustee disputes arise
Trustees have a fiduciary responsibility to the beneficiaries of a trust. Throughout the lifetime of the trust, the trustee must exercise prudence, care and good faith when carrying out their duties as defined by the trust deed.
Where a trustee fails to meet these standards, beneficiaries and the settlor may decide to seek independent legal and tax advice. Common areas of concern include:
Communication
Delayed responses or unclear reporting can quickly erode confidence in the trustee.
Beneficiaries may feel left in the dark or ignored if decisions are not clearly communicated.
Examples might include agreed quarterly statements that are consistently issued late, or queries from beneficiaries that go unanswered for weeks without acknowledgement.
Administration
Beneficiaries may experience delayed or mishandled distributions, tax filings, or inaccurate investment policy statements that do not reflect the wishes of the settlor and beneficiaries.
Incorrect distributions or missed deadlines can create legal and tax exposure that then requires further investigation and advice.
Examples include distributions paid into the wrong bank account, missed annual company registry filings, or late submissions to HMRC, FATCA or CRS.
Lack of understanding
Some trust companies rely on a ‘one size fits all’ service model that does not align with the complex and evolving needs of a family, or provide the flexibility required in a dynastic structure.
Trustees who interpret the trust deed without recognising the wishes of the settlor, or to the detriment of the wider class of beneficiaries, can quickly generate dissatisfaction and a loss of confidence.
Conflict of interest or bias
Trustees should avoid favouring particular institutional investments or financial services firms due to financial or non-financial bias. The trustee must always act in the best interests of the beneficiaries and with impartiality.
The trustee must remain focused on beneficiaries’ best interests at all times, especially where there is conflict between different beneficiaries of the same trust.
The consequences of poor client service
Poor client service is often the visible symptom of deeper issues in governance, oversight or culture. It can lead to:
Loss of confidence in the trustee – Beneficiaries may start to scrutinise the trustee’s decision-making processes and service standards more closely.
Unnecessary professional costs – Disputes can result in legal and tax fees, and if unresolved may lead to court proceedings. These costs can impact both the trust fund and the trustee.
Increased family tension – Family disagreements require the trustee to act with prudence and to discharge their fiduciary responsibilities properly, taking account of all beneficiary interests. Failure to do so can heighten tensions among beneficiaries and connected parties.
Regulatory risk – Trustees must perform their duties in line with regulatory obligations and good practice. Poor service, weak controls or unmanaged conflicts of interest can all increase regulatory risk.
Reasons why trustees and company administrators are replaced
Where confidence has broken down, beneficiaries and settlors may conclude that a change of trust company is the best option. Common reasons include:
Restoring confidence and control
New administrators offering better transparency, service and engagement with beneficiaries.
A fresh relationship that is more responsive and better aligned with the family’s needs.
Tailored client service
Independent trust companies that focus on delivering excellent client service and truly understanding the needs and dynamics of the family, ideally within an owner-managed firm that can be agile and client-centred.
Improved governance and risk management
A new trustee can bring a team with stronger compliance, governance and oversight practices.
Alignment with values and legacy goals
Some trustees are better able to understand and support philanthropic goals, long-term planning and other specific requirements.
Simplified communication and responsiveness
Where communication has become a source of frustration, even after a complaint has been raised, moving to an alternative trust company or trustee can resolve the issue and bring relief to the family.
Key considerations when transferring to a new trust company or trustee
A change of trustee should be carefully planned. Key steps include:
Review the trust deed – Confirm that the power to remove and replace trustees is clearly defined and understood.
Assess exit costs – Some trust companies impose resignation fees or require a notice period.
Undertake due diligence on the new trustee – Review their expertise, team structure, service model, governance framework and track record.
Plan the transition carefully – A managed handover helps ensure continuity, preserves relationships and avoids disruption for beneficiaries and advisers.
How Fiduchi can help
At Fiduchi, we understand that trust structures exist to protect family wealth, support succession and deliver on long-term objectives. That requires a trustee that combines high standards of governance with strong, consistent client service.
Our ethos of Excellence through Ownership underpins the way we work with families, beneficiaries and their advisers. We take responsibility for outcomes, communication and follow-through, so that clients can have confidence in how their structures are administered.
When families and their advisers choose to move to Fiduchi, we:
Work closely with existing advisers to plan and manage the transition.
Take time to understand the family’s dynamics, objectives and values.
Provide clear points of contact, regular communication and timely reporting.
Maintain robust compliance and risk management processes in line with regulatory expectations.
Focus on building long-term relationships based on transparency, responsiveness and trust.
Conclusion
Trustee disputes are often a sign that client service, communication or governance have fallen short. If you are facing recurring issues, limited transparency or a growing sense of dissatisfaction, moving to a new service provider can bring both immediate and long-term benefits.
It is ultimately about ensuring the trust operates in line with its purpose, values and the best interests of beneficiaries – and that requires a capable, communicative and responsive trustee whose approach reflects Excellence through Ownership.
For more information about our services please explore the website or, for an informal discussion, please contact Graham Marsh TEP, Heidi Thompson or David Hopkins.