As Tennessee’s trust laws have evolved in recent years, companies have utilized these laws to position themselves as nationwide leaders in the trust industry. We sat down with the executive management at Nashville-based Cumberland Trust to discuss how they’re using the new trust laws to expand, what it means for day-to-day operations and what comes next.*
How did you get started with Cumberland Trust?
Joseph K. Presley: In 2001, when Cumberland Trust was started, there was a need for an alternative to the traditional trust model. Many families were looking for trust administration services, but they didn’t want to discontinue the relationship with their financial advisors and other professional advisors. We were fortunate that Cumberland Trust had several individuals who had come from the trust industry. The idea was to make it a successful venture, and that a lot of people would be attracted to us.
Who is the standard trust customer?
Jennifer Menzie: From individual families to lawyers, our clientele runs the gamut. Our typical client is someone who is looking for a trust company that is going to provide them with a high level of customer service, is open to working with a corporate trustee and will allow them to continue to work with their team of advisors, such as their financial advisor, their estate planning attorney, their CPA.
Cumberland Trust has a long history of working with special-needs trusts. Can you speak to that program and why it’s so important to you all?
Michelle Diamond: One thing that Cumberland Trust did in the very beginning was take a look at niche types of administration that either the larger institutions were not willing to take on, types of administration that were unique to our locations or even trends that we thought were going to be the next big thing in our industry.
As it turned out, special needs was one of those opportunities. Over the last 20 years, we’ve heard more and more stories about families needing special-needs trust administration for multiple reasons: It’s for disability reasons, families with adults or children with disabilities, or maybe for families with mental health-related issues. We’ve always heard about this need for families and knew we could help.
So, as we evolved as a company, we felt if we could have teams dedicated to those types of administration, it would resonate well both locally as well as with advisors and families across the country. We really didn’t know 20 years ago how Cumberland Trust was going to evolve in this space; today special-needs trusts represent 15% to 20% of the trusts we administer. Even though it isn’t our biggest sector, this is something that makes Cumberland Trust unique, and we’re all proud to be a part of it.
What does expansion mean for the day-to-day operations of Cumberland?
Jennifer Menzie: I think it means that we have to continuously look at our infrastructure and at how we’re utilizing technology. Over the past five years, we’ve really invested in technology, and certainly that helped us during the pandemic. Also, we have to look at staffing and make sure that we continue to expand and have appropriate staffing to be able to serve our clients well. A big part of that is making sure we have the right people in the right seats at the leadership level, manager level, so that they can provide training and mentorship to our new employees.
What challenges come with expansion?
Jennifer Menzie: Several challenges will naturally come up, so a big focus will be making sure that, as we expand and change, we are continuing to stay true to who we are. For our employees, that means maintaining this culture that we’ve created and making sure that we’re providing a great place to work. Then, for our clients, it’s making sure that we stay on top of our customer service delivery model. So, staying true to who we are and where we’ve come from. It’s always a challenge, but one that we’re up for.
Michelle Diamond: I totally agree with Jennie and will add that at the end of the day what will help us navigate these challenges is our people. Jennie has answered that question perfectly because, whether it’s getting them in the right seats or hiring the right people, at the end of the day, we’re a service organization selling service to families in support of what they need and often at very critical times.
Where is Cumberland Trust expanding?
Jennifer Menzie: We’ve always grown organically, so where we expand really depends on where we’re needed. In our organic growth strategy, we’re centered on the message of “Why Tennessee, why a corporate trustee and then ultimately why Cumberland Trust?” That may be someone who wants to take advantage of Tennessee’s favorable trust legislation, someone who finds Cumberland to be a great fit from a customer service delivery model. Our growth really is where we’re pulled, where we’re resonating with our messaging.
Joseph K. Presley: One reason we’ve been able to expand is because of our relationships. In fact, all of our relationships have a financial advisor or attorney component. Many times, the financial advisors, along with the other advisors who work with these families, are located in different regions or states. So even though the primary administration is done here in Tennessee, there’s still a lot of interaction with all the advisors with whom these families work throughout the country.
Michelle Diamond: One thing that our leadership has done a great job of doing is helping us narrow in over the last five-plus years as we expand. It’s not just where people want us to be; it’s those jurisdictions that welcome a Tennessee trust company into the conversation. It’s those advisors who may not like the option of their own in-house trust company and they’re looking for that alternative. It’s those families who are comfortable knowing that their trustee may not be in the same state that they’re in, but they know that we’re going to provide a service that they can’t find locally. So, for all those reasons, we don’t suffer from the opportunity.
What makes Tennessee’s regulatory climate special?
Joseph K. Presley: Having a group like the Tennessee Bankers Association, along with the Tennessee Department of Financial Institutions, has been extremely helpful to making Tennessee the place to be for trusts. They’ve been with us from the beginning, going to the legislature and introducing new statutes. I think having them as a partner has differentiated Tennessee from a lot of other states that work with attorneys only. We’ve been able to work with the banking industry to expand our services, grow our industry, but also, very importantly, work with the legislature because that’s the key to success whenever you’re implementing or trying to grow a trust industry.
Runcie Clements, IV: We’ve had a great relationship with the Tennessee Department of Financial Institutions. In one word, I would define them as cooperative. While they’re obviously committed to protecting consumers, they’re also committed to the success of all the financial institutions in Tennessee. They’ve consistently made themselves available for discussions with us about different business ideas we may have. Whether it’s expansion by opening an office in another state or just simply seeking reciprocity in other states without opening an office, they’ve helped us many times to navigate these situations by speaking with their counterparts in other states. They have also given us feedback when we have requested their guidance in brainstorming possible new service lines and have overall been an excellent sounding board.
What’s next for Cumberland Trust?
Joseph K. Presley: Our biggest goal is always to hire the right people. But, just as importantly, we’ll need to continue to communicate to all of these potential families who are out there who may not know that this alternative trust model exists. For us, our biggest opportunity is to continue to communicate with people and their advisors as to how Cumberland can help them. And we really think the opportunity is significant and are excited to expand it.
Jennifer Menzie: We’ll continue to do exactly what we’ve been doing, which is have a focus on taking care of our employees, have a focus on taking care of our clients, and continue to push the message of the strength of Tennessee trust legislation and the strength of our service offerings. So, for me, it’s staying the course.
Michelle Diamond: The blessing of the first 20 years of Cumberland is we can look back and say, “How do we want to take what we have and build on it? How are we going to be committed to how we position ourselves?” So, a lot of what’s next is staying true to what we’ve done in the past with our clients and providing top-notch personal service. I’m as excited at year 21 and a half as I was at year one. I think it’s such a fun place to be. Our people are amazing, and I think our opportunities are extraordinary as we move forward.
Runcie Clements, IV: Staying involved with the Tennessee Bankers Association is definitely a priority. They’ve been instrumental in getting Tennessee’s laws where they need to be. Now Tennessee is probably ranked among the top five states for administration of various types of trusts, and the TBA has been instrumental in helping keep Tennessee in the forefront. They have created a tremendous forum for trust law discussion by putting together a legislative committee of top attorneys and representatives of the trust company community who are familiar not only with Tennessee law but also with the laws of other states and have given this committee the opportunity to offer ideas and to propose legislative changes. Due to the collaboration of this committee and the TBA, Tennessee maintains its status as a top jurisdiction for trust administration.
