Public Trust is not going to give away its advantage this time
The Public Trust, while being a 127 year old player, has hardly been seen as one of the big innovators in the financial services industry in the past decade or so.
Sunday, March 12th 2000, 12:00AM
The Public Trust, while being a 127 year old player, has hardly been seen as one of the big innovators in the financial services industry in the past decade or so.
Part of this image can be traced right back to its beginnings in 1873 when it was established to provide trustee services for people who could not afford legal services.
The office is now trying to shake off its image as an organisation staffed by a bunch of cardy wearing civil servants and project itself as a 21st century organisation.
Part of this process involves telling people it is technologically advanced and that it is a leader in some product areas.
An added bonus to this rebirth is the highly supportive attitude of the new Government to the business. One of the PTO's senior executives recently said that comments made by the new minister in charge, Jim Anderton, were the most positive he has ever heard from a Government about the office.
The previous National-led administration was proposing to split the PTO into a state-owned enterprise and a trustee company, and either transfer some of its miscellaneous statutory responsibilities to other agencies or throw them open to competition.
Anderton says he wants to foster the PTO's growth, and keep it as a publicly owned asset. "The era of privatisation is over," he says. "The time is gone when the Government is going to sit back and run publicly-owned companies into the ground so that they can be closed or sold."
Anderton acknowledges the office is disadvantaged by some of the 89 Acts of Parliament which impact on its operations and he is supportive of making changes that will put the PTO on an equal footing with its competitors.
What is the PTO trying to tell us?
A key message Public Trustee David Hutton is trying to promote is that the office is technologically advanced.
While this is not something customers see, it is, he believes a big plus for the organisation.
Its key competitive strengths are in the areas of will writing, trusts and estate administration.
Hutton says the PTO has about 20 per cent of the will writing market and it wants to grow that by about five percent over the next few years on the back of a recently launched marketing campaign.
He says the PTO was the first in the world to launch plain English wills. However, one of the problems the office faces in this area is that it handed this "technology" to its competitors, the Law Society, in much the same way New Zealand horticulturists gave their kiwifruit to the rest of the world.
Recently, the PTO has taken will writing to a new level - a level which it thinks is far ahead of anyone else. What it has done is automated the process and developed a software package for will writing.
Again this it thought to be a first in the world. This time though the PTO isn't going to hand the product to its competitors on a plate.
Hutton says when final testing is completed the product will be rolled out amongst its offices and on the Internet. There is even a possibility it could be used in offshore markets such as Australia.
The PTO's current strategy is to use its will writing service as a loss leader (by law it's not allowed to charge for the service) and build up its client base. Once that's done it can cross-sell other products such as term life, mortgages, investments (including its newly launched term deposits) and trusts to the enlarged client base.
While the office has 350,000 customers it says it hasn't been that good at attracting new ones.
What it's been good at is retaining customers, especially through the generations.
Currently the PTO has about $2 billion worth of personal trust business under management, and about half of that is in managed funds.
Sales and marketing general manager Trevor Hockley says the PTO would like to, in time, get its products "on the shopping list" of independent advisers. If it is successful in doing that it can look at broadening its distribution beyond its current 42 branch network.
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