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Trusts, Estates and Agency Accounts in the US - Industry Risk Rating ReportPublished by: IBISWorld Published: Jan. 19, 2008 - 28 Pages Table of Contents
Industry Definition & Activities Industry Risk Score Risk Rating Analysis STRUCTURAL RISK Barriers to Entry Basis of Competition Domestic and International Markets Industry Assistance Life Cycle Industry Volatility GROWTH RISK Recent Growth Analysis Forecast Growth Analysis SENSITIVITY RISK Business Bankruptcies Interest Rates - 10-Year Bond Rate Average Age of Population Personal Savings Rate Real GDP Growth Dow Jones Industrial Average INDUSTRY RISK AND INDUSTRY RISK SCORING METHODOLOGY What is Industry Risk? The Industry Risk Scoring Methodology Risk Rating Score Definition AbstractIndustry Risk Ratings SynopsisThis Industry Risk Ratings report from IBISWorld evaluates the inherent risks associated with the Trusts, Estates and Agency Accounts in the US industry. Industry Risk is assumed to be 'the difficulty, or otherwise, of the business operating environment'. The report looks at the operational risk associated with this industry. Three types of risk are recognized in our analysis. These are: risk arising from within the industry itself (structural risk), risks arising from the expected future performance of the industry (growth risk) and risk arising from forces external to the industry (external sensitivity risk). This approach is new in that it analyses non-financial information surrounding each industry. Industries are scored on a 9-point scale, where 1 represents the lowest risk and 9 the highest. The Industry Risk score measures expected Industry Risk over the coming 12-18 months. Industry Definition This industry comprises legal entities, trusts, estates, or agency accounts, administered on behalf of the beneficiaries under the terms of a trust agreement, will, or agency agreement.A trust is a legal arrangement in which an individual gives fiduciary control of property to a person or institution for the benefit of beneficiaries. Fiduciaries can be individuals, corporations or associations, and they may be given the legal authority to make decisions regarding financial matters.An estate is often, but does not have to be, organized as a trust. The estate is basically a plan of administration and disposition of property before or after death. Estates can include wills, trusts and gifts.Agency accounts are accounts established as a courtesy to individuals or organizations. The account is normally established to receive funds for specific purposes. These could be to fund education, for example.In general, the elected fiduciary is responsible for keeping the account in good financial standing. Often, the trust deed, will, or agency agreement will state an investment objective of the fund. The income of such funds is mostly interest, dividends and other forms of investment income. The investment management of these funds is normally outsourced to third-party administrators, such as portfolio managers. Consequently, a major expense facing these entities is that associated with external management of the entity. The trustee manages the assets for the benefit of others. The trustee is legally obliged to make all trust-related decisions with the beneficiaries' interests in mind, and may be liable for damages in the event of not doing so. One of these decisions might be to outsource the investment decision to portfolio managers. Report Contents Risk Overview The Risk Overview chapter includes sections on Industry Definition and Activities, Industry Risk Score and Risk Rating Analysis. The Industry Definition and Activities section provides a detailed definition of the activities carried out by operators in this industry as defined in NAICS. A list of the primary activities of the industry is also included. The Industry Risk Score section provides the Overall Industry Risk Score as well as the Risk Scores for each of the three types of risk covered that combine to form the Overall Industry Risk Score. These three types of risk are Structural Risk, Growth Risk and External Sensitivity Risk. The Risk Rating Analysis section discusses the underlying factors contributing to the Overall Industry Risk Score. Structural Risk The Structural Risk chapter looks at risk arising from within the industry itself and provides a detailed discussion of the industry’s level of exposure to seven key indicators. These key indicators are Barriers to Entry, Competition, Industry Exports, Industry Imports, Level of Assistance, Life Cycle Stage and Volatility of Industry. The Overall Structural Risk Score is a weighted aggregation of these seven key indicators. Each of the key indicators is discussed in detail in this section. Growth Risk The Growth Risk chapter looks at risks arising from the expected future performance of the industry. The Overall Growth Risk Score is determined by amalgamating the scores for Recent Industry Growth and Forecast Industry Growth. Detailed analysis is provided discussing the reasons for the growth scores of both. Sensitivity Risk The Sensitivity Risk chapter looks at risks arising from forces (sensitivities) external to the industry. The Overall External Sensitivity Risk Score is determined by identifying the most significant (up to 6) external factors and weighting them to represent how significant each sensitivity is to the performance of the industry. Examples of External Sensitivities are Exchange Rates, Interest Rates, Commodity Prices and Government Regulations. There is also a detailed analysis of the affect each of the sensitivities has on the industry, including charts and data tables where appropriate. Industry Risk and Industry Risk Scoring Methodology This chapter provides an overview of how IBISWorld defines Industry Risk and discusses the methodology used to arrive at an Industry Risk Score. There is also a table that provides a definition of the seven levels of Industry Risk. Get Full Details About This Report >> |
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