An “Integrity Monitor” or independent fiduciary can oversee the investment program and the service providers retained to implement the program on behalf of the trust. It’s a good idea for the trust itself and for the trust beneficiaries.
A cautionary article in Forbes, “Trusts, Special Needs Trusts, Family Offices All Need Integrity Monitors But Don't Know It,” examines the value of having an “Integrity Monitor,” an individual with the knowledge and skills needed to add a layer of fiduciary protection for the trust and its beneficiaries. An Integrity Monitor should have the investment management industry and forensic expertise needed to prevent any wrongdoing with the administration of the trust.
If you don’t have an expert in money management malfeasance dedicated to overseeing the investment program of your trust, you may be taken advantage of daily throughout the lifetime of the trust.
It’s common practice for major companies, agencies, and governments to hire “inspector generals” to oversee their operations and prevent the occurrence or reoccurrence of illegal or unethical business practices, as well as to detect fraud.
Courts and regulators also often require that such a monitor be placed within a company to prevent future abuses as part of a legal settlement, when the company has engaged in past wrongdoing.
This should be a no-brainer decision to make. There’s no reason to wait until something goes wrong. Adding another layer of independent protection is relatively inexpensive to do and the potential to prevent or head off financial harm will be more than worth the cost.
Reference: Forbes (January 30, 2018) “Trusts, Special Needs Trusts, Family Offices All Need Integrity Monitors But Don't Know It”