Don’t Settle for Being a Larger Institution’s ‘Loss Leader’

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Investors with modest portfolios can find themselves in a dilemma when it comes to choosing an institution to help them manage their assets. The fact is, smaller clients can entirely too often get left behind at the biggest banks, mutual-fund companies or brokerage houses.

Keeping a close eye on our competitors, we know that most of the big guys have account minimums, that exclude smaller clients. Most of them either won’t accept the smaller accounts at all, or if they do, they are assigned to a call center somewhere, rather than an individual advisor or team the client can meet with face to face.

Therefore, the investor never sees an advisor face to face. It would be lucky if their advisor is even in the same state! And so, they must settle for a “1-800” trust officer to handle their needs. Needless to say, that sort of anonymous, long-distance relationship is unlikely to get very deep into the investor’s objectives or such important matters as risk tolerance, time frames or family situations.

That’s an important distinction we like to make between how Old North State Trust works with our clients, and what our big competitors do.

We don’t have minimums. We don’t pass our clients to faceless functionaries at the other end of a telephone line or email connection. If the fit is right for both us and the client, we will take on the business and we will work with the client as we do with all clients: by personally getting to know their situations and their concerns, and ensuring that we are available to them when needed.

That’s not to say we’ll necessarily take on just any business that comes along. Our standard for deciding to accept a client hinges on our ability to add value for that client. Also, it’s essential that a prospective client likes and needs what we offer – and how we operate. Those decisions are always based on individual client situations, usually after an extensive conversation. It’s never just a matter of numbers.

In an article that was recently published, it said big, aggressive wealth-management firms have been trying hard to pull customers away from more traditional trust business like local banks and state-focused companies like ours. Much of the motivation is the ability to sell financial products that carry higher commissions and profits, as well as offering such lucrative services as insurance and stock brokerage.

Technology is the one thing driving this, of course. Computerization, databases and online tools have made it easy for the biggest firms to offer a huge range of financial products, both their own and those offered by third parties. That might seem to be an advantage for a huge company, but we believe having a vast number of financial products to choose from isn’t the most important thing a good investment advisor has to offer. Sure, we can help with the same products the “big boys” handle. But we make a point of understanding the client’s needs, and the product’s suitability to those needs and objectives, not just looking at return-on-investment numbers from a database.

Some of the biggest new players in the trust business are very large mutual fund companies and brokerages. The article mentioned before argues that these companies see their trust customers, and this definitely applies to those with smaller portfolios, as a “loss leader.” The point is to get their business in the door, and away from community based competitors.

Anyone who needs the sorts of services – creating and managing trusts, investment advice and portfolio management – that a good trust operation provides, is invited to contact us and begin the conversation about whether we would be a good fit. It’s that fit, not an arbitrary dollar cut-off, that’s the key to a productive and trustworthy relationship for both parties.