FMR Corp., parent of Fidelity Investments, is opening trust companies in New York and Texas, two of the wealthiest markets in the country.
Fidelity Management Trust Company of Texas and Fidelity Management Trust Company of New York will manage personal trust accounts with assets exceeding $400,000. The primary source of clients will be Fidelity Investments, the country's largest mutual fund company.
The man tapped by Fidelity to run the Manhattan office knows a thing or two about enterprising trust companies. Brian Keeney joined Fidelity in December from U.S. Trust Company of New Jersey, Princeton, which he helped establish five years ago. The New Jersey trust bank is a subsidiary of U.S. Trust Corp., New York.
Before that, he had spent 13 years at Chase Manhattan Corp., where he worked in portfolio management and set up its San Diego trust office.
Culling prospects will be an entirely different kind of endeavor for Mr. Keeney and his counterpart in Houston, Rod Stell, who used to run the trust business for the former First Interstate Bank of Texas.
"Many banks have difficulty identifying prospects," Mr. Keeney said, "but we are sitting on a wealth of individuals who have a need for our services."
Advertisements for the New York office started running this week in The Wall Street Journal, and its grand opening will be Feb. 26. Texas trust marketing began in December.
Fidelity Management Trust has quite a captive audience: Fidelity Investments manages $496.3 billion. Fidelity Management Trust had $52.6 billion of discretionary trust assets-primarily in institutional accounts- at the end of 1995, the most recent data available.
The company does not disclose data on personal trust assets. Fidelity opened its Massachusetts trust company in 1993 and set up a California subsidiary last summer.
The minimum account size for revocable and irrevocable trust at Fidelity is $400,000 in cash, mutual funds, and individual securities. For charitable trusts, the minimum is $200,000.
"Given Fidelity and their national market power," said Robert M. Tetenbaum, executive vice president of First Manhattan Consulting Group, "I don't see any disadvantages at all. They just broadened the product set so they can continue with clients into the next life."
Fidelity Management Trust Company of Texas, which was granted trust powers in that state Dec. 9, installed Mr. Stell, the former First Interstate trust banker, as its president.
Although Mr. Keeney said he wants to go after prospects who are not already Fidelity customers, retaining asset management and the associated fee income is the raison d'etre for the new trust units.
"This is a natural extension of the client relationship from one generation to the next," Mr. Stell said. "It's worth it to the company to maintain those relationships for a long period."