BANK of Bermuda has become a force in the local trust market as a result of recent acquisitions from the Standard Chartered group, according to Peter Hodson, the general manager of private banking. The bank bought out Standard Chartered's private trust business earlier this year after acquiring its corporate trust business last year. The deals involved the acquisition of about 300 staff. The first deal, in July last year, took Bank of Bermuda's funds under administration to US$7 billion (about HK$54 billion). 'It obviously makes us a very major player in the trust business in Hong Kong from the private banking point of view,' Mr Hodson said. 'Standard Chartered and Hongkong Bank were the main local trust companies here so it was a very substantial deal for us and provided us with a substantial client base.' The Standard Chartered deals gave Bank of Bermuda a substantial private client base and extended its already big international network. Bank of Bermuda specialises in the administration side of private banking; supplying and servicing the trusts which are a central part of many asset protection and management plans. These are based in jurisdictions around the world according to the client's particular needs. Various nations have tailored their laws to attract trusts designed to protect assets from possible seizure by creditors or to overcome forced inheritance systems at home. Bank of Bermuda does not do any discretionary fund management, relying instead on external managers. Mr Hodson said this was for historical reasons. 'When we opened the business 10 years ago, it was in the corporate trust area, servicing collective investment vehicles and that is where the core of the business has been till recently,' he said. 'We have always been involved on the private side but it has not been as significant as the corporate trust side in Hong Kong. But we have been concentrating on it a lot more recently and the Standard Chartered acquisition was the next stage up.' Trusts have been described as products in the private banking environment but, to Bank of Bermuda, they are very much services. Mr Hodson said: 'Inherently, they are vehicles for asset protection. One aspect is planning for the future inheritance structure of the family; trusts can help keep the money in the family. They are also used in immigration planning in protecting assets and investments and minimising tax.' Then there is the 1997 issue. Mr Hodson said although clients were concerned, they were treating it as just one aspect of their overall planning. He said: 'We are seeing a lot more awareness in the market now of the use of trusts and what they can achieve for asset planning purposes. The typical client has assets located all over the world, so it is quite natural they want to try to immunise those assets from a political risk point of view. 'It is not just the political ramifications of 1997, but whether exchange controls are introduced and whether tax is increased. So it is not a running scared approach at all.' Traditionally, trustee fees have been based on a percentage of assets under management but, with increased competition, some have begun charging administration fees on a fixed annual basis subject to review. Separate charges are levied for investment management, custody, transactions and banking services. Clients sought reliability and substance when choosing a trust administrator, Mr Hodson said. 'Because a trust is intended to be a long-term relationship, clients have to be comfortable they are not dealing with a bucket shop; that the institution is going to be there for many years. 'The bank's reputation and experience are key factors. Then there is the network the bank has to offer clients.'