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Cover Update: Building Trust

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  • | 6:00 p.m. January 4, 2008
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Cover Update: Building Trust

When Charles Idelson left SunTrust Bank in 2002 after having risen to president of the Lee County area, he didn't want to start another community bank.

Too many of those, he says.

Instead, he and two other SunTrust veterans started Investors' Security Trust in 2004 to help wealthy families manage their money and the trusts established in their estate plans. The company now manages 311 accounts with about $330 million, up from 200 accounts with $210 million in early 2006.

Idelson says the company is still on track to meet its goal of managing $1 billion by 2014. "We've had nice, steady growth since we opened," he says.

It was a good move. Community banks today are feeling the effects of the real estate downturn as problem loans rise.

Investors' Security Trust fills a niche for trust services that has been largely abandoned in the frenzy of consolidation of the banking industry.

Increasingly, banks' trust departments have been consolidated out of state because they haven't been as profitable as other areas of banking. If a trust isn't substantial, beneficiaries often don't get the personal attention that local trust officers once gave them.

That's given local firms such as Investors' Security Trust an edge in delivering face-to-face service to help wealthy families manage their financial affairs. Trust companies such as Idelson's can act as a neutral third party and provide professional guidance without the emotions that tend to hurt a family's finances.

Investors' Security Trust makes money by charging an annual fee that is a percentage of the assets it manages. It ranges from 1% for smaller accounts to 0.45% for large sums. Roughly half of the investments it manages are held in trusts. "We're still the best deal in town," Idelson chuckles.

Typically, trust companies and bank trust departments are well established in money centers such as Naples and Sarasota. But the success of Idelson's firm shows that they can also make inroads in neighboring cities such as Fort Myers.

Still, Naples is tempting despite the fact that there are more than 50 trust departments that fight for business. Investors Security Trust recently hired Joe Cleveland, a former trust administrator at Key Bank in Naples. "Joe has nice relationships with attorneys and independent banks in Naples," Idelson says. "We will probably look at renting some space in Naples next year."

Idelson says Charlotte County is still an area where the firm might expand, but it's hard to find good trust administrators. "Until you can find the right people for the job, there's no need to go anywhere," he says.

-Jean Gruss


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