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Over the past eight years, there has been a significant movement in the formation of independent trust companies which not only specialize in traditional trust services, but also are not owned by bank holding companies, brokerage houses or other financial institutions. These companies are generally owned either wholly or, to a significant degree, by management. The trend reached a point where a trade association, The Association of Independent Trust Companies (AITCO), was formed. More than 40 trust companies and at least an equal number of associate member "wannabes", interested in establishing their own companies, are represented in the membership.
THE MOVE TO INDEPENDENCE
There was a time when a trust officer was a lifer. Due to the ongoing consolidation in banking, that time is gone and many trust officers have found themselves working in a changed environment--or not working at all. Clients also have suffered in many instances. The trust officer that they have grown to rely on over the years often has little ability to control the quality of the service offered. Operations centers in a distant city are unresponsive and smaller trusts are crammed into a common trust fund or mutual funds--often with little recognition of the tax consequences of the sale of appreciated securities. The very availability of trust services for accounts of less than half a million or a million becomes questionable. Even where they are available, high minimum fees required by larger institutions often make them uneconomical.
A NEW OPPORTUNITY
Where many trust officers have simply accepted the new order as something that must be borne, a significant number of others have found opportunity in adversity and established independent trust companies dedicated to providing personal, local service to a clientele that would otherwise be disenfranchised. In the process, many have found an entrepreneurial zeal that they never before realized existed.
Lyman Frick was the trust department head at the First National Bank of St. Joseph, MO, when it failed and its assets were acquired by Commerce Bankshares of Kansas City. After two years ofincreasing frustration, he and other trust department employees offered to buy out the department. When their offer was refused they resigned en masse and filed for a charter as an independent, non depository, trust company--The Trust...