Why Trust Companies Are the Safest Solution for Client Assets

At Two Ocean Trust, safeguarding client assets is at the foundation of our company. As a regulated trust company, our structure and approach are fundamentally different from banks and brokerage firms. We are fiduciaries, legally obligated to act solely in the best interests of our clients and prohibited from using client assets for any purpose other than their benefit. This creates a level of security and independence unmatched by other financial institutions.

Fiduciary Duty: Acting Only in Clients’ Interests

Trust companies operate under a fiduciary standard, which requires that all decisions are made exclusively for the benefit of clients and beneficiaries. In contrast, banks and broker-dealers often face competing priorities. Banks seek to profit from lending client deposits, and broker-dealers earn revenue from trading activity and product sales. These activities can present conflicts of interest. A trust company’s single purpose is to safeguard and manage client assets with prudence, impartiality, and transparency.

Custody: Holding Assets, Not Owning Them

The difference between how trust companies, banks, and brokerage firms hold assets is fundamental:

• Banks take legal ownership of client deposits and can use them to make loans.
  

• Broker-dealers hold assets in their name (street name) and can lend them to other market participants to earn interest.
  

• Trust companies, by contrast, hold assets separately and solely for the benefit of each client.

  
  

At Two Ocean Trust, we cannot loan, pledge, or rehypothecate client assets. They are always segregated and remain the property of our clients. This structure provides a higher degree of safety and control than is available through banks or broker-dealers.

Protection: Insurance vs. Structural

Because banks and broker-dealers use client assets in their business operations, they rely on FDIC or SIPC insurance to protect depositors and investors in case of institutional failure. Trust companies, on the other hand, do not engage in lending or trading. Assets are not exposed to credit or counterparty risk. Instead, assets are held in the client’s name and are not subject to the claims of the company’s creditors under any circumstance.

Regulatory Oversight and Continuity

Trust companies are subject to rigorous regulatory supervision at both the state and federal levels. This oversight includes frequent examinations, audits, detailed reporting requirements, and strict standards for capital adequacy and compliance. As corporate fiduciaries, trust companies also provide continuity that individual trustees or investment advisors cannot—ensuring that fiduciary stewardship persists for generations, regardless of personnel or ownership changes.

Wyoming’s Bankruptcy-Remote Accounts

Wyoming continues to lead the nation in modern trust legislation, offering unparalleled protection for client assets. Under Wyoming statutes, a “covered account” is an account held by a Wyoming trust company for the benefit of a client, where the trust company has no right to the funds other than to act as fiduciary. State law expressly provides that assets held in covered accounts cannot be treated as the institution’s property in any receivership or bankruptcy. Two Ocean Trust’s client agreements designate all custodial accounts as covered accounts, ensuring statutory protection and legal certainty for all clients.

The Bottom Line

At Two Ocean Trust, client assets are held—not owned—by the firm, managed solely for the benefit of each client, and protected under the most advanced fiduciary laws in the United States. This structure ensures that client wealth remains secure and preserved for future generations.

About Two Ocean Trust

Two Ocean Trust partners with ultra-high-net-worth individuals, family offices, and foundations. As a privately owned trust company, independent of other financial institutions, we deliver trust, custody, and investment solutions to a select number of important relationships. This approach ensures our interests align fully with our clients’ long-term goals.