It was been almost 7 years since we posted the piece titled “Trade Association Membership: weighing the costs vs. the benefits”. Towards the end of that article, we discuss how the master trust sponsor fee provides a crucial source of revenue to state associations. That post was written subsequent to the dissolution of
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Association Master Trusts: De Facto Trustees
By Bill Stalter on
According to court filings, the reorganization plans for the Wisconsin Master Trust and California Master Trust each seek to eliminate ‘de facto trustee’ relationships that allowed the respective associations’ executives to ‘misuse, misspend, and mismanage millions of dollars’ of trust funds, and to direct funds towards inappropriate and unsuitable investments that served the association’s, rather…
Transparency:The Curious Case of the Missouri Funeral Trust
By Bill Stalter on
Posted in Master Trusts
In his final report to the court, the Wisconsin Master Trust receiver proposed a new trust agreement that is intended to provide “transparency, accountability, oversight and prudence”. Similarly, the California Attorney General seeks to provide transparency through express reporting requirements included in the trust agreement proposed to the court presiding over the California Master…
State Master Trusts: Plans of Reorganization
By Bill Stalter on
Two of the country’s largest association ran master trusts now have pending plans of reorganization. On May 14th, the receiver appointed for the Wisconsin Master Trust filed a Final Report that outlined to a court his proposal for the reorganization of that program. On May 22nd, a hearing was held in…
An Investment Strategy: the Man without a Plan
By Bill Stalter on
If you haven’t noticed, there has been some turnover among the associations’ preneed fund managers. With the threat of additional litigation in Wisconsin, this trend could continue. But not all of the turnover has been as publicized as what we have seen in Illinois and Wisconsin. After 20 years at the helm, Merrill Lynch recently…
A False Sense of Security: the hold harmless for investment oversight
By Bill Stalter on
We previously discussed how the funeral home or cemetery assumes most of a preneed trust’s investment risk when selling a guaranteed preneed contract, and therefore should be afforded a role in the trust’s investment decisions (Fund Managers: Is Your O&E Coverage Current?). But in that same post, we were careful to point out…
A Call to Mark to Market: The NFDA
By Bill Stalter on
A short three and a half years ago, the funeral industry reeled from the collapse of National Prearranged Services and the emerging story of the Illinois Master Trust. The NFDA was slow to respond to the crisis, and when it did, this blog joined the criticism. Fast forward to September 2012, and the NFDA responds…
The Preneed Subsidy
By Bill Stalter on
Posted in Preneed
While the reasons are open to debate, it is common knowledge within the funeral industry that a small percentage of consumers cancel their preneed contracts. Consequently, some funeral directors tend to view their preneed block of business with a degree of certainty. Performance of the contracts, and recognition of the revenues, seems to be just…
California Master Trust: serious missteps, but not another IFDA
By Bill Stalter on
Posted in Preneed
In contrast to how the IFDA situation was handled, the California Department of Consumer Affairs has taken a public approach to disclosing its issues with the CFDA’s master trust by posting its website an audit report and the Association’s reply.
The DCA is unhappy with the Association, and the master trust fiduciary, with regard…
Confusion over the California Master Trust
By Bill Stalter on
The September edition of the Mortuary Management ran an excerpt from a Funeral Monitor article about the California Master Trust suffering a deficit.
If the story is accurate about the master trust’s shortage, the author’s speculation about the reasons for the deficit omits a possible factor that has existed for years: the 4% administration fee.
As explained…