A Key Partner for Your Business is the Trust Department

A Q&A with Masood Dehnavifar, J.D, SVP and Trust Department Manager

If you haven’t explored what a Trust team can do for you, your family and your business, now is the time to take a closer look. Masood Dehnavifar, J.D, SVP and Trust Department Manager shares an overview of how businesses and their owners can utilize our Trust Department’s expertise, platforms and solutions to make financial management easier.

1. What are the most common ways businesses work with the Trust Department?
MD: We provide three related, but different services, that businesses and business owners find beneficial.

First, we help business owners with both estate and business succession planning. We can provide guidance and information as a business owner works with their other advisors to create or modify their estate or succession plan.

Second, we provide sophisticated and fiduciary based investment management services.  We manage investment portfolios for individuals, as well as businesses, and seek to manage these in a tax efficient manner when appropriate. Typical investment portfolios under our management include IRA and other qualified accounts, trust accounts, and agency accounts for individuals, businesses and non-profit organizations. By combining our investment management services with our estate and business succession planning services, we are able to help enhance a business owner’s wealth during lifetime while also protecting and passing on that wealth to future generations.  

Third, we are a single source service provider for a company’s retirement (i.e., 401k and profit sharing) plans. Our team can manage all aspects of administering a retirement plan so that a business owner can focus on growing and meeting the needs of the business while also attracting and retaining talent.

2. For businesses exploring retirement plan options, what factors are important to consider when choosing a partner?
MD: There are four key factors a business owner should consider when choosing a retirement plan partner.  

First, most plans are serviced by multiple service providers. Our service model gives a business owner and its employees a single point of contact in the Merchants Bank Trust Department. This creates efficiency, lowers costs, and most importantly gives a business owner and its employees one party to hold accountable.  

Second, many business owners are taking on more liability associated with their retirement plan than they should. We see a lot of business owners serving as their own Trustee. We also see a lot of financial advisors serving in a 3(21) financial advisor capacity, as opposed to a 3(38) financial manager capacity. This results in the business owner bearing fiduciary liability for the mutual fund options within the retirement plan. Our platform allows us to accept these fiduciary capacities thereby effectively mitigating the risk to a business owner.  

Third, we utilize our investment management expertise when selecting and monitoring the mutual fund lineup. We find that our mutual fund lineup has better historical returns with lower internal expenses as compared to other providers.

Fourth, an important factor in choosing a retirement plan provider is always cost. A business owner should be analyzing the overall cost of plan administration across all applicable service providers. A business owner should also analyze the costs associated with the mutual fund lineup. Not all retirement plan service providers are transparent in their overall cost structure. We have found that the efficiency of our platform results in significant cost savings for our clients.

3. What do you think makes the Merchants Bank Trust Department a unique partner?
MD: I believe we have established platforms, infrastructure and solutions that are unparalleled which speaks directly to our value proposition.

That value proposition allows the Merchants Bank Trust Department to give our clients the best of both worlds. This means our clients get all the benefits of working with a community-based bank that is local, flexible, responsive, service oriented, and relationship based.  At the same time, we have the size and scale to offer experience, expertise, sophistication, and technological resource that clients expect from a larger financial institution. Additionally, our overheard is lower compared to a lot of the competition, which means we can deliver our services at a more reasonable price point.

4. What’s the first step a business can take to explore Trust services?
MD: I’m glad you asked. We would love to have a conversation with you about how the services our Trust Department provides can be tailored to the needs of you, your family and your business. You can contact our Trust Department at (507) 457-1153 or trust@merchantsbank.com.

About Masood: Masood joined Merchants Bank in 2018 as Senior Vice President/Trust Department Manager. Prior to Merchants, he was an attorney with Ryan & Grinde, Ltd., with offices in Rochester and St. Charles, where his practice focused on both the transactional and litigation aspects of wills, trusts, probate and estate planning. Masood has a law degree from Washburn University School of Law in Topeka, KS, and an undergraduate degree from Colby College in Waterville, ME. Masood currently resides in Rochester, MN with his wife Angie and two children, Lily and Elijah. He engages with local communities by serving on the Rochester Hockey Foundation Board and the Winona State University Legal Studies Board, as well as coaching youth hockey and lacrosse.