Thursday, December 17, 2009

Types of Trusts

Here is a question very similar to what many of you will see on the Series 65 or Series 66:

What type of trust requires the trustee to distribute to beneficiaries immediately?

A. Simple

B. Complex

C. Irrevocable

D. Revocable

EXPLANATION: a simple trust distributes "DNI" (distributable net income) to the beneficiaries, while a complex trust can retain some of the income to build up the "corpus" or principal. The choices "irrevocable" and "revocable" have more to do with estate taxes and tax liabilities during the lifetime of the grantor.



  1. Hello, again.
    I applied to a position at a bank. They said they have a position available in the treasury department.
    If I'm hired for that position, what would I be doing? What do I need to know?
    They said that I may be able to do it because I have a Series 7.

  2. Not sure off the top of my head, but I'm betting you'd be helping people buy US Treasuries. Even though they're "exempt securities," an agent needs a license to sell them to the public for compensation.

    Can't think of anything easier to sell than Treasuries. If you need a refresher, go to

    I'll double-check, though--maybe they use "treasury" to mean something else.

  3. As I thought, "treasury" doesn't necessarily mean "US Treasury securities." Unfortunately, "treasury management" looks like a huge, amorphous term that probably means different things to different people. It involves managing cash flow and the balance sheet for a bank . . . which would involve securities to some extent.

  4. Thank you for replying. I really appreciate it.
    I realized that working at banks require some accounting knowledge.
    I think they prefer accounting knowledge to a Series 7.
    Right now, I'm stumped. I don't really know what direction to go to.
    I'm looking into wealth management and mutual funds. Do these require prospecting?

  5. The term "treasury department" definitely links up with an accounting background, but maybe they have an active trading department where a Series 7 is required. On some level, you might need to say to yourself, "I don't care what they think they need--I'm the right person for this job, period." Most entry level positions involve building a book of business, whether for a B/D or RIA. I get the sense that you want to be a "buy-side" trader. See if you can get into the trading departments for investment advisers--especially an adviser that manages their own mutual funds (Janus, Ariel, etc.). You'd rather enter their trades than call Joe retail investor and try to interest him in an annuity, right?