American Express Co. is using its 8,500 financial planners to market trust services.
This leaves trust officers, traditionally the point of contact for customers, to work in the background.
American Express Trust Co. also is expanding geographically, having won regulatory approval this year to operate in Wisconsin, Indiana, Pennsylvania, New Jersey, and Massachusetts in addition to its base in Minnesota and Illinois.
The Minneapolis-based unit was started in late 1993 to hold retirement plan funds, which constitute the bulk of its assets under management, whose total American Express declined to disclose.
Under American Express' strategy of the past two quarters, trust services are being offered to clients of American Express Financial Advisors, which managed $149.4 billion at yearend. In the past, the company's financial planners had watched their clients pick other trustees.
"The demand is pent up. If we don't speak up, the client will be approached by somebody else," said J. Scott Slater, senior vice president of personal trust services at American Express.
The American Express brand name should carry weight with prospects, observers said.
"It's a workable model if they can convince the client they are going to be in the trust business over the long term," said Norman R. Lubin, chief executive officer at FMS Group Inc., a consulting firm in Blue Bell, Pa.
But Mr. Slater, who joined American Express in September, succeeding Karin Lucas, said that being well established is not an advantage if the company is too set in its ways.
American Express' treatment of trust clients is radically different from banks' administration of such accounts. American Express trust officers work in the background, leaving face-to-face contact with clients to the planners in the field.
At many banks, trust officers do not want to share clients with investment managers or lenders for fear they will damage a relationship, said Mr. Slater, who has had jobs at Citicorp, General Mills Inc., Norwest Corp., and even a chain of 800 hair salons.
"The difference is, many of the established trust companies have been doing this for 100 years," he said. "We're establishing new policies on how to do it."
