In the latest nonbank entry into the affluent market, an investment bank affiliate has opened a trust company under the leadership of two former bankers.

Wood, Struthers & Winthrop, the money management arm of securities firm Donaldson, Lufkin & Jenrette, has established Winthrop Trust Co. to target individuals and families with at least $5 million in net worth.

Winthrop Trust is headed by chairman Guy S. Waltman and president and chief executive officer G. Moffett Cochran - both of whom previously made their mark at Bessemer Trust Co., New York.

Mr. Waltman and Mr. Cochran worked together at Bessemer for 10 years, before Mr. Cochran left in 1992 to join the financial services group of DLJ, a unit of the Equitable Cos.

Mr. Cochran then recruited his friend to run Winthrop Trust, which aims to help Wood Struthers collect about $10 billion of assets under management before the end of the decade.

Mr. Waltman joined in January.

Winthrop Trust is one of several trust companies that have been established outside of bank premises in the last decade.

Known as brokerage-affiliated trust companies, they include units of Merrill Lynch, PaineWebber, and Raymond James.

These firms have entered the trust business because of the growth of the market combined with the enactment of Prudent Investor Rules in many states that encourage fiduciaries to diversify investments.

Mr. Waltman said that nonbank firms are succeeding in the trust business because sophisticated affluent customers are looking for more than just the plain-vanilla investment offerings from bank trust departments.

He said that through Wood Struthers, DLJ has been servicing some 300 wealthy clients with exotic private investment offerings - like a venture capital arm, a hedge fund, and a merchant banking fund. For the past decade, these offerings has given investors an average annual return of more then 100%, he said.

"The whole mind-set in the trust business has been to be very conservative," Mr. Waltman said. "DLJ has never been conservative about investing money."

Others, however, disagree with the idea that Wall Street is better positioned than banks to serve the wealthy.

Timothy L. Vaill, president of $223 million-asset Boston Private Bancorp, said that while people like good investment performance, they are less interested in overly complex investment instruments.

"Let's not confuse sophisticated investments with esoteric investments," he said.

Moreover, any bank that has invested in asset management should be well equipped to handle a growing demand for trust and investment business, he said.

But John M. Clark, a Beaverton, Ore.-based trust consultant, said he isn't sure that either banks or firms like Wood Struthers are the answer for many trust clients. He said that people expect personal attention from their fiduciaries - something that banks have lost sight of, he said, and brokerages are incapable of giving because of their sales emphasis.

Mr. Clark said that the answer may lie in the growing number of smaller, independent trust companies mushrooming around the country that have a higher level of personal contact with the client.

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