Oghogho Osula is the managing director, Coronation Trustees Limited. she speaks in this interview with Iheanyi Nwachukwu. Excerpts
In specific terms, what are the roles of corporate trustees in business transactions?
Our primary duty as trustees is to protect the interests of investors and beneficiaries. It is our fiduciary duty to ensure that we abide by the provisions of the trust deed, act in the best interest of parties, and uphold our duty of loyalty and accountability. As you are aware, a trustee is a fiduciary who is appointed to be an impartial and independent entity that holds assets on behalf of others with a legal obligation to administer it solely for the purposes specified. The primary duty of a trustee is to protect the interest of its clients by managing trust assets, monitoring obligations of issuers, ensuring timely payments of agreed disbursements as well as compliance with the terms of the Trust deed. We should not forget that beyond corporate business transactions, trustees also provide an avenue for wealth transfer, providing privacy, protection and confidentiality.
Are you among those that believe that the business of trusteeship needs to be completely overhauled?
I do not believe that the business needs complete overhauling. I agree that some parts of what we currently do will become outdated, I also believe that how we do our business will change. I believe the sectors where we can create value will change. However, I do not expect the fundamental reasons as to why we exist to change. We exist to create, protect and preserve assets for posterity. How we do the business and the people who we serve will evolve. I see the use of technology can easily revolutionize how we operate.
What are the challenges facing your industry?
The key challenges today include issues like low confidence in the Industry, the degree of sophistication required by clients which many players are unable to provide.
The knowledge gap for people who need our services, and some client preference for foreign trust firms in certain transactions. Another major issue is the cultural/religious barriers, both in private and public trust, like Sharia practices, also many people hesitate at the prospect of preparing in the eventuality of their passing; cultural beliefs and superstition can bring restrictions to many Trust transactions. However, with the introduction of non-interest, Sukuk bonds more opportunities have been created. There is need for capacity building for practitioners, regulators and the capital market community. We can solve this by partnering with agencies in jurisdictions where they are ahead, e.g London, Middle East, even locally getting a structured way of sharing knowledge. More publications required in this field.
When you compare Nigerian corporate trustees to other countries, where do you think we stand?
We are still developing the industry landscape in this region so other countries are currently ahead. Countries like India, the United Kingdom, the United States, and even South Africa, all have better developed financial markets. However, we are actively taking steps to ensure that our innovative organization will be at the helm of this development process.
Succession planning is one of the main businesses of corporate trustees. How can corporate trustees help solve problems associated with succession planning?
The issue here is creating structures that enable seamless transfer of wealth from one generation to the next. A plausible solution to this issue would be to educate people on the importance of consolidating their assets as a prelude to setting up a trust, through which they can transfer said assets to the next generations. A trust is less challenged than a will and has the added benefit of incurring less tax (probate).
As the CEO of Coronation Trustees Limited, your primary duty as trustees is to protect the interests of investors and beneficiaries. How well have you played this role?
My experiences in over 27 years in the financial sector- ranging from commercial banking to asset management and trusteeship has prepared me to deliver superior services to the investors and beneficiaries that we serve. I have played the role of Coronation Trustees CEO effectively with the support of my team. This is reflected in the growth of our assets under custody in security arrangements as well as nominees, to N15.8billion as at end of 2017. Thus, showing the confidence reposed in us by our chosen clients. At Coronation Trustees, we ensure best-in-class administration and protection of our clients’ assets.
The issue of fees is always reoccurring in dealing with trustees. Where do you place your pricing model? …Competitive, industry-driven or what?
I am surprised that people think fees are prohibitive in dealing with Trustees, Trustees are the least paid in terms of fees in the capital market. Also, most trustees charge less than lawyers who are worth their salt. The most important thing clients should thing about is the value that they receive, the cost savings they can achieve, the benefits they derive far outweigh the fees. On the issue of pricing model, we do not intend to compete on the basis of price, we will focus on ensuring that we create benefits that will make the fees irrelevant, because the peace of mind we will create will compensate.
What factors make Coronation Trustees Limited stand out from others in the marketplace?
The key differentiator between Coronation Trustees and our competitors is that we possess extensive knowledge and experience as a result of direct engagement with individuals and corporate clients in a wide spectrum of industries which include oil and gas, manufacturing, real estate and the public sector. Our team has a wealth of knowledge and combined experience in law, finance and risk management, which enables us to deliver superior services in asset preservation, management, wealth creation and succession planning solutions to our diverse range of clients. We ensure best-in-class administration and protection of our clients’ assets at all times.
We understand that despite our in-house expertise to deliver premium, tailored solutions for our clients, it is essential to work with external parties from time to time. Therefore, we partner with businesses within the Coronation Merchant Bank Group, as well as other financial institutions, to develop synergies. We also possess a wide business network that covers the major cities of Nigeria, making us more accessible to our clients.
Can you tell us about your products and services? …If any, how do they align with the vision of Coronation Trustees Limited?
We act as trustees for a variety of transactions, both locally and offshore transactions. We are strategically positioned to offer public, corporate and private trust services. Our tailored products and services are classified into three broad categories: Estate Planning, Corporate Trust, and Public Trust.
The Estate planning category consists of services rendered for managing and safekeeping the assets of stakeholders in wills, Private trusts, Living trusts, Family trusts, Education trusts and philanthropic ventures. Our estate planning services help our clients consolidate their assets and be better positioned to seamlessly pass on their wealth to their loved ones.
The corporate trust segment deals with protecting the assets of stakeholders exposed to corporate bonds, debentures, loan syndications and collective investment schemes. Our corporate trust services are tailored to institutional clients
Lastly, the public-trust category is tailored towards protecting the assets of government entities that often engage in the issue government bonds, public-private partnerships, and escrow services.
Our vision is to be Africa’s leading investment bank and our results-driven nature has made it possible for us to build and sustain a track record that will allow us to realize this vision. Within our first year of operation, we were appointed as joint trustees to the Lagos State (Series I) N500 billion Fixed Rate Bond Programme; the largest 2016 subnational bond transaction. We have also been appointed as joint Trustees to the proposed UACN Property Development Company Plc (UPDC Plc) up to N20billion Bond Issuance Programme. Our ability to match our products with the clients needs in these landmark transactions serve as an example of how we are taking the right steps to ensure that we realise our vision of becoming Africa’s premier Investment Bank.
What is your biggest goal in the corporate trustees in business?
One of my goals is to redefine the industry; I believe that there is so much that can be done in the industry than is currently being done. For instance, I would like to disrupt the status quo in regard to who the industry leaders are. I don’t want to give away too much of my plans. I use the likes of GT Bank, Access bank as reference points who revolutionized the banking industry with unique value propositions and have thus captured a significant share of the market.