by Monica Chamness
Staff Writer
Because commercial banks are most often used to handle trust accounts, they have been able to maximize profits by limiting the choice of products available to the customer. They have also pretty much enjoyed a monopoly on the trust administration industry.
Kristin McLauchlan and Mary Biggs Knauer, two local financial veterans, decided there must be a better way. As a result, Legacy Trust Company was born.
“A group of investors approached us about starting a private trust company,” said McLauchlan, president and CEO of the organization. “Banks moved from being service oriented to being product oriented. We felt there was a need in the market.”
Unlike a bank’s approach to trust funds, Legacy Trust does not directly manage portfolios. Services such as daily administration, bill paying, filing tax returns and managing investment managers are their specialities. They also handle client relationships and meet quarterly with investment managers. Trust accounts are used for many purposes, including college educations, charitable donations, assistance to a surviving spouse or to modify a tax structure.
“Most firms do in-house investment management,” said McLauchlan. “We will outsource so our client can make more choices based on performance, style and suitability.”
The entrepreneurs were introduced to each other through contacts they had on the board of directors for the Ronald McDonald House. From there, a business relationship developed. McLauchlan managed trust and investments for SunTrust at the beach for over a decade. Knauer learned the trade during her nine-year tenure in Barnett Bank’s trust department. The women opened an office in Ponte Vedra Beach recently, but plan to extend their services throughout Northeast Florida.
“We had done market research and knew Ponte Vedra was a strong market,” said McLauchlan. “We started here because this is the market I know.”
Just a few weeks into the business, they already have a number of clients. They also have a database of roughly a 1,000 local names. A huge direct mail campaign is out of the question, though.
“That is not the preferred marketing method for this business,” said Knauer. “Personal referrals by other trust customers, professionals and CPAs are acceptable.”
As could be suspected, their target market encompasses high net worth individuals and foundations.
“Our primary focus is service,” said McLauchlan. “Service will be key to everything we do. We want to make our relationships personalized and keep our client base small enough where we can maintain the service.”
Establishing a trust business was no easy task. The lengthy process began with interviews of the shareholders and directors. Next, the State inquired about the nature of the business, why it was being formed and the experience of the principals. Then came the background checks. Once they cleared the approval process — insurance in place, policies and procedures established — the State conducted an audit. Legacy Trust finally received its charter in August.
The 2,086 square-foot facility has plenty of room for the new business to grow. Right now it’s just Knauer, McLauchlan and their office manager, but they are considering hiring a senior administrator, senior trust officer and senior trust administrator.
“Everybody is excited about the fact that we’re independent,” said McLauchlan.
“We’re very optimistic,” added Knauer. “We’ve been well-received by the professional and legal community in Jacksonville. We want to be the premier trust company in North Florida to
provide financial and fiduciary services.”