With rapid economic development in China, more and more families are becoming wealthy. After accumulating assets, how to protect them and keep adding value to them becomes a headache for many. Founded in 1853, U.S.Trust is a financial institution dedicated to serving the most successful individuals in the U.S. Its clients are millionaires and billionaires. Recently, Xing Zong, of Duke University Chinese Students and Scholars Association, held an exclusive interview with Tom Clark, the former division president and managing director of U.S. Trust Company N.A. Mr. Clark right now is the President of Duke University Alumni Association.
Z: Tom, welcome back to Duke. You worked for U.S. Trust before you retired. This company is an investment management company known for exclusively focusing on managing wealth for the world's most successful individuals and families. First question, how do you define “most wealthy” people in U.S.? Can an average family also put money into U.S. Trust? C: The services provided by U.S. Trust are designed for people who have sophisticated or complicated needs. The minimums are very high, so it wouldn’t make sense for the average family, whose average income is 40,000 dollars, to bank at U.S. Trust. That is also true even for family income around 100,000 dollars. The U.S. Trust’s target market is the top 1% of the wealthiest families in the America. The Trust company not only manages stock, mutual funds, cash, but also does financial planning, banking, and trust management.
Perhaps “Trust accounts” are not a common concept in China. A Trust is a legal entity, a document, which controls assets. It says what happens to the money. A person could change his mind, but a Trust has fixed features. It is a set mechanism that controls the distribution of the wealth. The concept “trust” has to do with a legal entity created by a trust document. It can be created through a Will so it can survive after you die. This concept may not be familiar to your readers. It is not very common even in a lot of western countries. It is particularly common in British and American history.
Z: Let me digress a little bit by asking about these wealthy people. How many of them are self-made and how many have inherited wealth? C: I can’t give you the exact number. Most of the wealth U.S. Trust is handling these days is newly made wealth. It reflects what is happening in this world, in this country. When I joined U.S. Trust in the 1970s, that was not true. Most of the money was inherited, from grandfather, great grandfather. You know, 1970 is a recent day in China, but an old day in the U.S. (a hearty laugh). U.S. Trust is the oldest Trust company in the United States. From Chinese perspective, that’s probably not very old, but from an American perspective, 1853 is quite ancient!
Z: I think your answers will give incentive for more adventurous people to come to U.S. to pursue their American dream and accumulate good wealth. C: Let me back up a step. Most of my U.S. Trust career was on the banking side, not on the investment side. Some of the banking services are especially good for people who are making money. So we help them make their fortune and live in a certain way while they are doing that. I know people who started out with a successful profession or a successful business. You probably know the word “private equity”. People started those businesses only 20 or 30 years ago and now some of them are billionaires. They are still young! I am not even talking about people who discovered oil! Rather these are people who created good investment strategies and made themselves not only wealthy, but extremely wealthy.
Z: In China, there is a famous saying “Wealth can’t inherit more than three generations”.
