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
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A Peace Offering: Fiducary Partners and the WFDA Receiver
By Bill Stalter on
Fiduciary Partners, the corporate fiduciary for the Wisconsin and Illinois master trusts, broke its silence this week with a statement to the Funeral Service Insider. The statement was made in response to criticisms previously reported by FSI, and reflects the receiver and fiduciary working together to get their “message” out and avoid the kind of…
Checks and Balances: Who has your back?
By Bill Stalter on
In the days that followed the Wisconsin Funeral Directors Association being placed into receivership, some of the WFDA’s sister associations were quick to point out they had ‘checks and balances’ that would protect consumers’ funds from the problems that tripped up the Wisconsin Funeral Trust. As we reported in our last post, a crucial ‘check…
Wisconsin: borrowing from the NPS playbook
By Bill Stalter on
Recent document disclosures are reflecting that several factors contributed to the WFDA’s master trust deficiency (and the appointment of a receiver). Certain of those factors relate to the fees paid to fund managers and the association’s sponsorship charges. Those factors are relevant to other association master trusts, and we will explore them in subsequent posts.
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…
Wisconsin: Where is the Love?
By Bill Stalter on
Posted in Funeral, Master Trusts
When news of the Wisconsin receivership was made public, I anticipated some signs of support from other state associations. The strength of a professional relationship can be measured by the support given subsequent to a public indictment. But, when that support comes in the form of hackneyed advice, the accused is left to wonder about…
One Too Many Guarantees: Wisconsin and the SEC
By Bill Stalter on
When news that the Wisconsin Funeral Directors Association and its master trust had been put into receivership, I anticipated that the association may have fallen victim to a perfect storm: when an antiquated preneed law collides with a volatile investment market. But, subsequent news accounts are painting a bleak picture of poor planning and…
The Preneed Haves and Have Nots
By Bill Stalter on
Posted in Cemeteries, Preneed
It is no secret that the larger funeral home operators have more preneed options than the industry’s mom and pops. The large operators have the volume of business that will attract insurance companies and banks, and their program incentives and discounts. Economies of scale provide the larger operator preneed advantages when going ‘toe to toe&rsquo…
In Too Deep to Turn Back: the IFDA’s response to Regions Bank
By Bill Stalter on
Posted in IFDA
In a recent article, Bruce Ruston provides a detailed account of the drama behind the IFDA master trust and its divesture of the key man insurance policies. It is a long, costly story about an organization that pushed the legal envelop in several directions with disastrous results: a master trust without a corporate trustee, insurance…
The Next Twist in the IFDA/Merrill Lynch saga
By Bill Stalter on
The Springfield Journal-Register reported last week on the latest lawsuit to hit Merrill Lynch, the IFDA and the law firm that represented the Association.
One aspect of the lawsuit focuses upon the claim that the key man insurance policies sold to the master trust were not suitable investments. Without an insurable interest, the policies could…