Transparent Fees, why are they Important when shopping for a Trustee?

August 1, 2024

When it comes to finding a low cost non-profit trustee like CPT Institute for your Individual Special Needs Trust (SNT) or Pooled Special Needs Trust (PSNT) be sure they are transparent about all their fees. In this blog post, we will explore what transparent fees are and why they are so important when selecting a Non-profit Trustee.

Understanding Transparent Fees

Transparent fees are charges that are fully disclosed by service providers, leaving no hidden costs or surprises. This means that every cost associated with the service is clearly outlined and explained to the client. For a Individual and Pooled Special Needs Trust, these fees can include:

  • Enrollment Fees: The initial cost to setup the trust or join a Pooled trust.
  • Monthly or Annual Management Fees: Ongoing charges for the administration of the trust. Many charge a percentage fee based on the amount of assets in your trust. At CPT Institute we only charge a flat monthly fee.
  • Investment Management Fees: Fees charged by custody agents or investment firms for managing the assets within the trust. The maximum money management fee charged by our custody agents if .60 basis points which is just over 1/2 of a %. The industry norm is 1% to 3%, be sure to ask it they share fees with any third parties.

Transparency in fees ensures that clients understand exactly what they are paying for, how much they are paying, and why they are paying it.

Beware of OTHER fees:

  • Fees to move your account to a new trustee
  • Annual accounting fees
  • Tax preparation fees
  • Hourly fees for one one support

The Importance of Fee Transparency

1. Builds Trust

Clients need to feel confident that there are no hidden charges waiting to surface later on. Always work with a Trustee that is upfront about all costs, it builds a foundation of trust between the trustee and the client.

2. Facilitates Informed Decisions

Understanding the full cost structure allows individuals and families to make informed decisions about which trust provider / trustee to choose based on their financial situation and needs.

3. Ensures Fairness

Transparent fees ensure that clients are only paying for the services they receive, and at rates that are fair and justified. This is particularly important for those who rely on a Special Needs Trust to manage their limited resources.

4. Avoids Conflicts of Interest

When fees are transparent, it’s easier to identify potential conflicts of interest. Clients can be assured that their trust provider is acting in their best interests, rather than being swayed by undisclosed financial incentives.

5. Promotes Accountability

Providers who disclose their fees openly are more likely to be accountable for the services they provide. They must justify their costs and the quality of their service, which can lead to higher standards and better outcomes for clients.

CPT Institute’s Commitment to Transparent Fees

At CPT Institute, we believe in complete transparency with our fee structure. We charge a flat monthly fee for the management of your Trust. This straightforward approach means you won’t be caught off guard by unexpected costs.

Additionally, it’s important to note that custody agents or investment firms charge separate money management fees. These are distinct from the administrative fees charged by CPT Institute and are also fully disclosed to ensure that our clients have a clear understanding of where their money is going.

In conclusion, transparent fees are essential when shopping for a Trustee. They empower clients, foster trust, and promote a healthy financial relationship between the trust provider and the beneficiaries. At CPT Institute, we stand by our commitment to transparency, ensuring that our clients can confidently make the best decisions for their financial future.