An asset management firm in Phoenix is seeking approval to hold deposits for its clients.
AssetMark Trust, a part of AssetMark Financial, has filed an application with the Federal Deposit Insurance Corp. for deposit insurance. The company already has a trust charter in Arizona.
The trust company, which had $28.5 billion in assets under custody on Dec. 31, has no intention of getting into traditional banking, Gary Zyla, AssetMark Financial’s chief financial officer, said in an interview. There are no plans for traditional checking products, mortgage services or retail offices, he said.
The company is applying for FDIC insurance to accommodate cash balances associated with its 150,000 clients, Zyla said.
AssetMark Trust said in its application that it held about $1.1 billion in cash on Dec. 31.
The only credit products AssetMark Trust will offer are loans collateralized against assets in a customer’s investment portfolio, without having to liquidate those securities, the application said.
Richard Kenny, a retired CEO of Charles Schwab Bank and a director at Plumas Bancorp in Quincy, Calif., will serve on AssetMark Trust’s board.
AssetMark Financial, which hopes to get FDIC approval by the end of this year, aims to start offering deposits to its clients in early 2019, Zyla said.
“We believe this will enhance the existing client base’s security and experience and … will help attract new clients,” Zyla said. “We will not be marketing this as a banking account, but there are plenty of investors who have cash on the side and will be happy with our capabilities.”