Monday, August 10, 2009

The Fraud Conversation

Unfortunately, we all now live in a time when malicious fraudulent acts are a reality in our lives. This comes in many forms, identity theft, credit card fraud and pointedly, investment fraud. We all are affected by the scandals of the day, most recently the Bernie Madoff Ponzi scheme. While we at Unified Trust were not party to this or any other fraud in our 24 year history, we still have to answer the sad question of ‘I never heard of Unified Trust, how do I know you aren’t another Bernie Madoff?’. In conversations with many of our existing Advisor Partners and Advisor prospects, we are told that they are being asked the same type of question. Perhaps, this is the penalty for being independent or for being a boutique service provider or simply a reality of today’s world? In recent days, we’ve taken several steps internally to provide our clients, both Plan Sponsors and Advisors alike, assurances that when money is received by Unified Trust as a service provider that it does reach is intended destination, the Mutual Funds selected by the participants.

As a fiduciary, we advocate clients take measures to protect themselves. At a minimum, clients can do the following:
  • Ask to be placed as a third party statement recipient on any accounts where money is held, such as a Mutual Fund Statement.
  • Confirm with the service providers that moneys are being held by a separate body or custodian from the entity generating the reporting.
  • Ask providers to supply independent source verification of the health of the organization they select. These can be balance sheets, audit records and the like.

Unified Trust has produced a ‘client approved’ article that discusses some of the causes of the Madoff scheme and what clients can do to protect themselves.

Click here to read the article—How UTC Prevents Investment Fraud

Additionally, earlier this year, Unified Trust launched a due diligence website where Plan Sponsors and Advisors can find links to independent sources of information on Unified Trust, Trust Companies and the Trust system. Here you will find:

  • Independent Verification of Unified Trust Company’s CEFEX certification for Fiduciary Best Practices
  • Department of Labor Oversight
  • FDIC Trust Examination Manual
  • Unified Trust Company Quarterly Call Reports Federal Financial Institutions Examination Council (“FFIEC”) Central Data Repository
  • Fiduciary360 Fiduciary Best Practices Home Page
  • U.S. Office of the Controller of Currency (“OCC”) Unified Trust Company Governance
  • Most recent SAS 70 Audit Report
  • Most recent Unified Financial Services, Inc. Audit Report

To access the due diligence site, please logon to and select the Conduct Corporate Due Diligence link under the Account Information link on the left side of the page.