Technical article
A US$2 Million Trust: Bank That Invests Versus Bank That Only Holds Title
In a directed trust the bank has no duty to review or watch the adviser, and the adviser's fees are billed separately.
Imagine a family with US$2 million for a trust. They meet a bank that offers two choices. In one, the bank runs the money. In the other, the bank only holds title and an outside adviser runs it. They want to know what each costs and who does what.
The terms first. In a delegated trust the trustee also runs the investments. In a directed trust an outside adviser does. In a directed trust the bank has no duty to review or watch the adviser, and the adviser's fees are billed separately.
Here are the yearly costs at US$2 million. They are sums from published inputs, not quotes.
| How it is run | Yearly cost | The sum behind it |
|---|---|---|
| Family-managed | About 0.13% to 0.29% | Index funds at 0.09% to 0.14% (US$1,800 to US$2,800), plus a tax return at US$750 to US$3,000 |
| Bank does everything (delegated) | About 0.59% plus fund costs | 0.65% on the first US$1 million and 0.53% on the next, which is US$11,800 |
| Bank holds title, adviser invests (directed) | About 1.2% to 1.5% plus fund costs | The directed fee of 0.50% on the first US$1 million and 0.40% on the next, which is US$9,000 or 0.45%, plus an adviser at 0.75% to 1.00% |
The bank rates come from one bank's 2026 price sheet, tier C. The adviser range is an estimate from a money-advice website, tier U, for 1 to 5 million dollars. A survey of nearly 1,000 advisers reported by an industry site, about 2017, found a median stated fee of 0.75% above US$2 million, which is tier B. Fund costs are 2025 averages: 0.09% to 0.14% for index funds and 0.36% to 0.40% for mutual funds.
At this size the percentage matters, because the bank's US$6,000 minimum is well below the fee the tiers give. The minimum rules at US$500,000. At US$2 million it does not.
A UK example shows a similar price for advice. A private bank in the UK lists ongoing investment advice at 0.60% on the first GBP 1.25 million, falling to 0.15% above GBP 6 million. On GBP 2 million (about US$2.6 million) that is GBP 10,875 (about US$14,000), or 0.54%. It is advice only, and the fund managers' fees come on top.
A South Dakota trustee lists a directed trust at about 0.10% plus US$1,000 per line item, with a US$5,500 minimum. That is a different structure from the bank's, and the line-item charge grows with the number of holdings.
You might say: "The bank doing everything costs less, so why would anyone split the roles?" The sources show the sums. Splitting adds the adviser's fee, and it leaves the watching of the adviser with the family, since the bank has no duty to do it.
You could ask each bank who watches the investments, who answers if the adviser errs, and what a change of adviser costs. You could also ask for a fee quote that includes the fund costs, since they come on top of every row.
This touches family. In a directed trust, someone in the family has to pick and review the adviser. In a delegated trust that role sits with the bank.
If you have chosen between these two set-ups, what decided it for you? Share it here. Someone at the same fork may find it useful.
Figures are estimates for planning, based on public data. Date read: October 2026.
Sources
- BOK Financial Advisor Trust Services fee schedule, January 2026 (C)
- Investormint wealth adviser fee benchmarks, August 2026 (U)
- Kitces.com citing an adviser fee survey, about 2017 (B)
- Weatherbys Private Bank schedule of charges, January 2026 (C)
- Investment Company Institute, fund fees 2025 (B)
- South Dakota Trust Company fact sheet (C)
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