Guaranty Bank and Trust Co. of Denver has sold its trust and asset management departments to Asset Management Group, an investment and advisory firm, creating Colorado's only national nondepository trust bank.
In exchange for the units, Guaranty Bank got 50% ownership of a new company, AMG Guaranty Trust.
AMG Guaranty, which was opened Wednesday, has $3.7 billion of trust assets from Guaranty Bank and Trust and $1.6 billion of assets under management from the former AMG. The parents have combined 1,600 clients in the new company.
Because AMG Guaranty is separate from the bank, the 13 members of Guaranty Bank's trust and asset management department have moved over to the former AMG's offices. Guaranty Bank will continue to run its six Denver-area branches from its current headquarters.
Earl Wright, the president and chief executive officer of AMG Guaranty, said it is one of 100 trust banks licensed by the Office of the Comptroller of the Currency to operate nationally and the only one in the state that can do so.
It will offer financial counseling, investment management, alternative investment products, trust services, tax planning, bill-paying and record keeping services, charitable giving services, and group financial planning programs, Mr. Wright said. It can also serve as custodian of clients' assets, he said.
It will not offer proprietary mutual fund products. Instead, he said, it will select 40 to 50 top funds to recommend to its clients.
Mr. Wright, who founded Asset Management Group in 1972, said AMG Guaranty Trust's regional offices in Chicago, Philadelphia, and New York would help it attract wealthy clients nationwide.
He said AMG Guaranty has not set a minimum investment amount because it does not want to cut itself off from "future wealth."
"Often, there are customers with potential. We want to take customers with potential and build them into high-net-worth individuals. That is how you build loyalty," Mr. Wright said. "At most banks, you need significant assets to get attention. We want people with potential, and we want to help them realize it."
Mr. Wright said the partnership originated several years ago when he spoke with Ronald Moore, the chairman of Guaranty Bank and Trust. Mr. Moore said the trust department of his bank had $350 million to $400 million of assets under management but realized it could not offer a full range of services to wealthy people. At the same time, Mr. Wright said, his asset management firm was losing custody of trust assets to banks.
Mr. Moore called the merger a natural step. "They had things we wanted, and we had trust services that they needed," he said.
David Ross Palmer, a high-net-worth analyst at LoBue Associates of Northbrook, Ill., said that several national competitors are among Denver's securities firms, life insurance companies, and banks. Colorado's banking community is mostly branches of larger national banks, he said, and as a result, "most of the banks can't offer homegrown service."
"I don't know if any banks are handling Colorado's wealthy the right way," Mr. Palmer said. "I spent time in Aspen and in Denver this year and spoke with several banks on this topic. These institutions are still stuck in traditional methods. They are not taking the next step."
AMG Guaranty's challenge now is to deliver on its promise, he said.
"The biggest question is: Do they have the budget to do this?" Mr. Palmer said. "The concept is fine, but you have to perform. High-net-worth people have options."
Mr. Moore said that, to compete, AMG Guaranty is willing to make itself extremely useful. In addition to its financial services menu, the company is also considering offering concierge services.
"We not only want to look after wealth, we want to be able to pay their bills, take them to the airport, or take their pet to the vet," Mr. Moore said. "If our client needs a plumber, we want them to call us. That is how we are going to compete."
