Trustee supervision questions answered: approval, audit and complaints

Trustee supervision questions usually start with one worry: how do you know the person holding the trust assets is properly authorised and actually watched? In Switzerland, professional trustees are financial institutions under the Financial Institutions Act (FinIA, or LEFin in French). The answers below explain who approves a trustee, who checks the work afterwards, and what you can do as a settlor, beneficiary or adviser.

This is general information, not advice. What applies to you depends on the trust deed, the trustee's set-up and where you live, so an individual analysis is the right next step for a specific case.

Approval: who authorises a trustee

What is FINMA's role for a trustee?

FINMA, the Swiss Financial Market Supervisory Authority, grants the licence. Under the Act, asset managers and trustees are subject to its supervision, and FINMA involves a supervisory organisation in the day-to-day checking. FINMA is the authority that decides whether a trustee may operate; it does not manage your trust or take decisions on distributions.

Who counts as a trustee under the Act?

A trustee, in the legal sense, is someone who professionally manages or disposes of a separate pool of assets for a beneficiary or for a defined purpose, on the basis of a trust deed within the meaning of the 1985 Hague Convention (Art. 17 para. 2 FinIA). Trustees sit in the same family of financial institutions as asset managers, fund managers and securities firms (Art. 2 para. 1 FinIA).

When is trustee activity "professional"?

The Act treats an activity as professional when it is an independent economic activity carried out to earn a regular income (Art. 3 FinIA). A family member who acts once for a relative without a business behind it is generally in a different position from a firm that offers trusteeship to clients. Where the line falls in a particular case needs individual analysis.

What does a Swiss-based trustee need in order to be approved?

The Act sets structural requirements. A trustee based in Switzerland must be a sole proprietorship, a commercial company or a cooperative, entered in the commercial register (Art. 18 FinIA). Its management must include at least two qualified people with suitable training and enough professional experience (Art. 20 FinIA). Minimum capital for asset managers and trustees is CHF 100,000, paid in cash, together with suitable security or professional liability insurance (Art. 22 FinIA).

What does the trustee have to do once approved?

The Act describes the core duty: manage the separate assets, preserve their value and use them in line with their purpose (Art. 19 para. 2 FinIA). Your trust deed adds the detail. Our page on what a trustee owes the beneficiaries explains how those duties play out in practice.

Does approval mean the quality of service is assured?

No. Approval shows that the trustee met the legal conditions and is under supervision. It says nothing about responsiveness, judgement or fit with your family. Supervision has limits: it checks compliance with the rules, not whether you will be happy with the relationship. That is why due diligence on your trustee remains your own task.

Supervision: who watches the trustee

What is a supervisory organisation?

A supervisory organisation (organisme de surveillance, OS) is a body that FINMA has itself authorised and supervises. The Act provides that FINMA associates such an organisation with the supervision of asset managers and trustees, and that ongoing supervision is carried out by the organisations holding a FINMA authorisation (Art. 61 FinIA).

What is a self-regulatory organisation, and how is it different?

A self-regulatory organisation (SRO) deals with anti-money-laundering rules under the AMLA. A supervisory organisation checks prudential conditions of the licence. Some bodies do both. SO-FIT, for example, is a non-profit association authorised by FINMA that works as an SRO and as a prudential supervisory organisation for asset managers and trustees.

Which supervisory organisations exist?

FINMA's published list of authorised and supervised asset managers and trustees names, among others, OSFINcontrol AG, AOOS, SO-FIT and OSIF. When the system started, the first two organisations authorised were OSIF in Geneva and OSFIN in Neuchâtel. The list can change, so check FINMA's current publication rather than relying on a summary. Our guide on FINMA and SO-FIT puts these bodies in context.

Who audits the trustee?

The Act requires an annual audit by an audit firm within the meaning of Art. 43k of the FINMA Supervision Act (Art. 62 FinIA). The audit looks at the institution's compliance with its obligations. It is not a review of your family's trust decisions. A yearly compliance review by your trustee is a separate, client-facing exercise.

Does FINMA check my trust every year?

Not directly in the usual case. FINMA grants the authorisation; the supervisory organisation then verifies on an ongoing basis that the conditions are still met. Some institutions, such as certain Swiss group companies under FinIA, are supervised directly by FINMA, which publishes a separate list of them.

Do I have to be told about changes at the trustee?

The trustee, not you, has the reporting obligation toward its supervisor: changes in the facts on which the authorisation rests must be notified to the supervisory organisation in advance. As a client you have your own information rights under the trust deed and the law; see what information your trustee must give you.

Checking status and understanding limits

Can I check a trustee's status?

Yes. FINMA publishes a list of asset managers and trustees that are authorised and supervised by a supervisory organisation, a list of authorised supervisory organisations, and a list of institutions supervised directly by FINMA. Search for the exact legal name of the company, not a brand name, and compare it with the commercial register entry. The trustee due diligence questionnaire lists what else to ask.

Are individual trustees supervised?

It depends on whether the activity is professional (see above). A professional trustee that is an individual business owner can be a sole proprietorship and must be entered in the commercial register, so a person is not automatically outside the regime. A relative or friend acting without a business is typically not licensed, which can be a reasonable choice for a family but means no FINMA oversight. The page on individual or corporate trustee sets out the trade-offs.

Is a foreign trustee covered by this regime?

The rules above concern trustees based in Switzerland. A trustee elsewhere is supervised, if at all, under its own country's rules. Whether Swiss supervision matters for you is a question for the individual assessment.

Why did some firms only start applying around 2020?

Firms that did not need a licence under the old law had to report to FINMA within six months of the Act entering into force, then meet the requirements and apply for authorisation within three years. They could continue while affiliated with an SRO under the AMLA, and FINMA could extend these periods in some cases (Art. 74 FinIA). FINMA later stated that asset managers and trustees had until the end of 2022 to apply and prove membership of a supervisory organisation.

How many trustees reported to FINMA at the start?

By 30 June 2020, 272 trustees (and 1,934 asset managers) had reported to FINMA. That count is a snapshot of the transition period, not today's number of licensed trustees.

When something goes wrong

What if a trustee loses approval?

The consequences depend on the circumstances, and FINMA decides what measures apply to the institution. For you, the practical issue is the trust itself: who holds the assets, who can act, and whether a replacement is needed. The page on replacing a failing trustee and the step-by-step guide to changing trustee cover the practical sequence. Legal advice on the trust deed is essential here.

Which complaints route exists?

Start with the trustee's own complaints procedure and put your concern in writing. If it is not resolved, the supervisory organisation that oversees the trustee is the natural body to inform about possible rule breaches, and FINMA publishes information on how to report concerns. Disputes about money or breach of duty toward beneficiaries are a separate matter for the courts, discussed in a dispute between beneficiaries and the trustee.

Can the supervisor resolve my family dispute?

Generally not. A supervisor checks regulatory compliance; it does not decide how a discretion should have been exercised or award compensation. For those questions you look to the trust deed, the court and your own advisers.

What if my trustee has died or retired?

An individual trustee's death or retirement is a continuity issue under the trust deed rather than a supervision event. Our page on an individual trustee who has died or retired explains the usual steps.