‘Plan your child’s education with educational trust policy’

Desire of most parents is that their children gets the best form of education, thus the need for proper financial plan. Binta Max-Gbinije, chief executive, Stanbic IBTC Trustees Ltd in this interview with a group of journalist shares her thought on how educational trust plan can help parents achieve the desired education for their children. Modestus Anaesoronye was there. Excerpts

Stanbic IBTC Trustees Ltd launched a new product, an educational trust. What factors underscored the introduction of the product? Is this the first education-focused product to be introduced by Stanbic IBTC Trustees Ltd into the Nigerian market?

We evaluated the needs of our clients as we always seek to offer them bespoke solutions
and not just provide a one size fits all product or service to everyone and our investigations threw up the fact that Parents and guardians were desirous of providing quality education for their children and wards, agreeing with the truism that the best legacy you can give a child is a good education. This apparently is the dream of many discerning individuals and we then sought for a way to make this happen for our clients. It is our first and we are excited about the need it fills and the good it can do.

With low income levels in the country and quite a sizeable proportion of the population operating in the informal sector, in what way will this product/service be accessible to any parent or guardian that wishes to save for their children’s education?

In a nutshell, who needs to set up an educational trust? Everyone who will pay the price to make a dream a reality needs to set up
the trust. Your allusion to low income levels is one key reason why one must start early and save as often as possible to make this happen and by this, I refer to the ease of set-up of this trust and the flexibility it affords for the settlor to do this in a convenient way over a period of time from when the child is born if possible! To set up, we take the stress off the parent or guardian and have simplified the process for all. Call us, or send an email and we will have you sorted in no time.

Will the Stanbic IBTC educational trust apply to students studying in Nigeria only or does it have an offshore feature that is denominated in foreign currencies?

Another great feature of this product is that it does indeed have both capabilities, the onshore Nigerian offering and the offshore angle where payments may be made to institutions of learning in foreign currency under the terms of the trust. Contributions to the
educational trust and its investments are however made in Naira although we are able to effect payments in foreign currency at the prevailing interbank rates.

Over-regulation and intense competition in Nigeria often lead to homogeneity of products and services, leading to little or no brand differentiation.

How does the Stanbic IBTC Educational Trust differ from similar products offered by banks that are targeted at saving for education?

First off, this is a Trust, not just a bank product. A trust has many benefits apart from just saving for education, as it can evolve into a vehicle that caters for more than just education.

An added advantage is that we take the burden off our clients in terms of making the school fees and other attendant payments on their behalf whether they are there or not. A further benefit is that we ensure that diversion of funds is negated, making payments only to the school and on back of verified invoices. Another noteworthy angle is the return on investment from sound investment anagement that the funds enjoy while in the trust, as opposed to just socking away in an account where the funds do not get an appreciative return. A fifth advantage of the SET is that it is administered by a corporate trustee who handles all related matters with professionalism and objectivity for the good of the designated beneficiaries.

Can you give us an insight into other areas of need that Stanbic IBTC Trustees Ltd has identified and plans to intervene through bespoke products and services?

The Simple Will is a novel product that we are pleased to pioneer as well in the market and are passionate about because of the immeasurable benefits that it confers on subscribers to it.

The need to take steps and put an Estate Plan in place from now cannot be over-emphasized, it is the responsible thing to do because life happens, and if you can, you must do all in your power to ensure that when you go, you have left your dependents well taken care of and in a way that will you preserve the harmony of your family and you save them all time, trouble, and energy in accessing whatever assets you might have left behind.

When you juxtapose the coming of corporate trustees like Stanbic IBTC Trustees Ltd against the old practice of trusteeship among various ethnic groups in Nigeria, what trends have you observed in the past five years?

Clearly the fact that people are becoming more aware of the benefits of a corporate trustee jumps out at you immediately. While the age long practice was and is a good thing, it does have its drawbacks which are many and include issues like collusion and breach of trust, diversion of funds, termination of function because of death of the trustee, usually an individual, and family squabbling. A good corporate trustee on the other hand guarantees many unmatched advantages which include: continuity of role and function (since a going concern that will remain in business and continue to adhere to client’s instructions), objectivity and professionalism,
and quick and prompt attention to affairs and well as elimination of diversion.

The trust business is often interpreted in terms of death, transition, estate planning and execution. Do you think enough is being done by operators and regulators to raise the awareness on trusteeship in Nigeria to make it acceptable like any other normal business transaction?

We are not where we should be, but we are certainly also not where we used to be regulator and practitioners alike are raising the bar and massively educating the masses as to the benefits of the offering. This is gaining grounds in leaps and bounds but I agree that there is yet a long way to go. We will keep at it and educate, coach, teach and mentor at every forum every chance we get until the day that the average Nigerian will not tremble or consider it morbid to discuss Estate planning but see it for the very prudent course of action one ought to take once an individual attains adulthood.

To what extent have you been able to manage the deep-seated phobia associated with planning for life after death?

Education! Education!! Education!!! We inform show and tell, give facts and figures and explain until the client or prospect are better enlightened, informed and clearly understand the benefits and importance of planning and once they do, they turn around to thank us for steering them right. Like they say, knowledge is power, so once they have the key information, they are then empowered to make the right decisions.

So are you saying that with an effective estate plan, death should not come across as such a frightening experience especially as it concerns securing the future of one’s loved ones?

Correct! That’s exactly what I am saying. Death is inevitable, we will all go someday, and the question is the when and the how. We can make the end of our time a happy memory for our loved ones when we have left well, with affairs all neatly tidied up and when we have helped make the intergenerational wealth transfer a seamless or ‘painless’ process for them.

Stanbic IBTC made its name as an investment bank and has in the last ten years expanded its retail business, especially with the banking consolidation in Nigeria. To what extent has membership of the Standard Bank Group being instrumental in driving your trust business in Nigeria?

The Vision of our Group remains to be the One Stop shop for financial services in Nigeria, and we provide services and products from cradle to grave and we as Stanbic IBTC Trustees Limited (SITL) close that wealth circle, providing stellar service and innovative products for our teeming clientele. Being a part ofthis group that has such fantastic offerings has been beneficial, as the expertise gathered over the 153 years of operation stands us in good stead as we serve here in this market. We have access to wealth of experience across borders and can tap into a vast network to provide solutions as required.

It certainly was the obvious way to go to share what we offer in other climes to deserving Nigerians as well.

What targets have you set for Stanbic IBTC Trustees Ltd in the next five years in terms of customer acquisition and profitability?

More than just profitability is our desire to educate Nigerians and provide them a service that adds significant value and meets a key need. We are also not focused on just acquiring the clients and having the numbers as much as that would be a good thing, but are more committed to ensuring every single client we onboard experiences exciting customer service from us and is a very satisfied
client who will gladly refer us to others in turn.

With a clientele of happy clients, profitability for our shareholders should then be a given.