A report on the future of UK trust and estate practice by the
Society of Trust and Estate Practitioners.
full report in PDF format (1.93MB)
The landscape for STEP members in the United Kingdom is
changing fast. New regulations, new competition, new business
practices are all combining to offer up new challenges. As one STEP
member put it to us: 'We're going to be taken in to a completely
different sphere of how we do our work'.
In a seminar held in London in January 2010 we invited 36 STEP
members from around the country to share their views on what the
future held for their businesses.
Several themes emerged from this seminar, designed and moderated
by Magnus Spence of Spence Johnson. However, it was quite possible,
as some members pointed out, that the predictions discussed in this
session were not representative of the views of the wider STEP
membership in the UK. As a result, in May 2010, STEP conducted
quantitative research using the summary of the findings of the
January seminar. 284 respondents from across the UK participated in
this survey and were asked to express their degree of agreement
with each prediction ranging from 'strongly agree' to 'strongly
This paper draws conclusions by bringing together qualitative
opinions from the January seminar and the quantitative results of
the May survey.
The results in this report are grouped into three specific areas
- Clients' needs
- Business models and strategy
What emerges most clearly across these predictions is that our
members in the UK expect huge changes in coming years. The growing
role of the internet, the tendency towards multi-disciplinary
structures and the commoditisation of services are examples of
this. And yet the mood in the room on the day of the seminar was
not of anxiety but of anticipation. As one STEP member said: 'I
don't regard change as threatening and don't regard it as something
that need be seen as a problem.'
One of our tasks at STEP is continually to listen to the views
of our members. We hope that this document, the creation of which
has certainly helped us in this objective, also helps you in
casting light on how the future might impact your business. For
STEP, these findings will help the Society develop the most
effective support for members that it can to ensure that change
means not threat, but opportunity.
10 key predictions: agreed by over 50% of
Regulation will increase across the board. Although, on a
positive note, STEP members consider themselves to be better placed
than non-members to deal with increased regulation. A majority of
respondents thought that the prospective regulation of non-lawyer
will writers would be advantageous to their firm, but that the
impact of increased regulation on costs will make it
disproportionately harder for smaller firms to compete financially.
Regulation is not predicted by our members used in a variety of
Members are reporting a rise in people requiring specialist
advice due to increasingly complex family relationships including a
rise in the number of cross-border estates. The ever-expanding
availability of information through the internet is also having an
impact on clients' needs in the trust and estates market. This
information is leading to clients making more specific demands of
practitioners and demanding higher value-added services. The
increasing availability of information through the internet will
also result in downward pressure on pricing.
Business models and strategy
In England and Wales the legislative framework enabling
alternative business structures [ABSs] came into being with the
passing of the Legal Services Act 2007. Although, it is rumoured
that Jonathan Djanogly, the new man at the Ministry of Justice with
responsibility for implementing the Legal Services Act 2007, is not
enthusiastic about the philosophy behind ABSs and external
investment. In Scotland, the Legal Services [Scotland] Bill is
likely to have passed and introduced ABSs by the end of 2010.
STEP members' attitudes to alternative business structures
[ABSs] are determined by whether they see them as a threat or an
opportunity. As a result the survey questions around ABSs resulted
in less clear predictions.
There was a slim majority for those who thought ABSs will create
more awareness and hence more custom for private client
practitioners across the price spectrum. However, it was strongly
felt that ABSs will revolutionise the way services are delivered
and that a collision of differing cultures and regulatory regimes
will provide challenges.
Members did think that the market will polarise between those
competing on price and those offering bespoke services and that
clients will be more ready than they have been historically to move
from one service provider to another. They also thought that fewer
TEPs would offer will drafting services as a loss-leader. There was
less certainty as to where the growth in the market would come
from, with almost equal numbers agreeing and disagreeing with the
proposition that the biggest growth in the market will occur in the
areas in which practitioners compete on price.
Members thought the demand for the multi-disciplinary approach
will result in the increased use of outsourcing by firms and that
those adopting the multi-disciplinary approach will see increases
in efficiency as a result.
It was agreed that services in the middle end of the market will
be dominated by a commoditised approach, but members were unsure as
to whether increasing commoditisation would lead to growth in the
private client market as a whole.
Finally, members agreed that the industry was moving towards the
'One Trusted Advisor' model where the advisor knows their client,
and knows a network of specialists that they can manage to handle
all areas of estate administration.
further analysis, download the full report in PDF format