A small Ohio-based brokerage is setting up a local trust company to compete with the big banks that already operate trust businesses there.
Butler, Wick & Co., Youngstown, a 69-year-old securities firm with $1 billion under management, wants to challenge the trust businesses that Banc One Corp. and National City Corp. operate out of their Youngstown branches.
To get things started, the new Butler Wick Trust Co. pinched two National City trust executives from its Youngstown office.
Butler Wick chairman Thomas J. Cavalier credits the plethora of banking merger and acquisition activity for creating opportunities for local entities, including brokerages, to gain trust customers.
"When that happened, it made it possible to bring over some very talented people who have a lot of local contacts," Mr. Cavalier said.
Butler Wick named James H. Sisek as president, director, and senior trust officer of the new company. Previously, Mr. Sisek headed the trust department of National City Bank in Youngstown.
Mr. Sisek made the switch in tandem with David G. Owen, a former vice president of trust marketing for National City, who will hold a similar position at Butler Wick.
Mr. Cavalier thinks regional banks have alienated trust clients who want their service in town.
Butler Wick has only one local bank, Mahoning National Bank of Youngstown, as a trust competitor.
State regulations in Ohio may bar the formation of broker-affiliated trust companies, but Butler Wick has an office in Sharon, Pa., from which it applied for authorization by that state. Then the brokerage applied for foreign fiduciary powers from Ohio.
Mr. Cavalier states that local and independent trust service is better, a theme that continues to echo across the country as broker-affiliated trust companies and other local entities pose a competitive threat to banks.
"That's personal, you can't do it through 1-800-Trust. You want to know the people you're dealing with," Mr. Cavalier said.
Butler Wick's trust endeavor has evolved from existing managed account business the firm directs for wealthy individuals, corporations, and institutions through Butler Wick Asset Management Co., which it established five years ago.