In Legacy Theyll Trust

January 30, 2004
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GRAND RAPIDS — Ten years ago Bob Prevette and Bill Walker organized the Private Client Group — also known as the Wealth Management Group — in the trust department at what was then Old Kent Bank.

Now they’re back together and about to do the same thing at their own bank, called Legacy Trust Bank.

The two men said the bank, located in Suite 600 of the Frey Building, at the outset will provide trust services to five area community banks and to people or families or estates seeking trust or wealth management services, or both.

The new bank is an outgrowth of Legacy Financial Services, an independent registered financial advisory firm that Walker established two years ago and in which Prevette joined him after early retirement from Fifth Third Bank and the expiration of his non-compete agreement.

Prevette and Walker told the Business Journal that Legacy would provide services to United Bank of Michigan, Ionia County National Bank and Choice One Bank in Sparta — all of which are shareholders in Legacy. They said Legacy also is negotiating trust service contracts with Greenville Community Bank and Community Shores Bank of Muskegon.

“We think starting with those five represent about $1 billion in assets in total,” Prevette said. “That’s pretty fertile territory. We’ll focus our efforts there first and expand as we grow the business enough to justify adding more staff.”

He said that’s only about a third of the potential bank market for Legacy’s services.

Legacy counts 15 community banks in Kent County or contiguous counties that lack trust services.

“Many of them have been around for a while and some of them are new,” Prevette said. “They’ve been good banks within their respective communities, but they do not have the necessary trust powers to provide trust services.

“They’ve been struggling with that, I’m sure, for many years because it’s a different service from traditional banking services. It takes some capital and it takes a while to get a department ramped up. You’ve got to find the right people, all the while trying to focus on their core deposit and lending business.”

The nice thing about Legacy Trust, he said, is that it fills a needed service gap at a community bank but without presenting the threat of taking away clientele.

Walker said that in addition to providing trust services to banks, Legacy would concentrate on personal wealth management, though a trust bank also can provide such services to corporations.

“We’re going to concentrate solely on managing wealth for individuals and families under guidelines and policies established by them,” he said.

Both men have lived here for decades. Prevette, a Cascade resident, is a native of the Detroit area but has been in West Michigan 20-plus years.

Walker was born and grew up in Springfield, Ill.

“I moved to Grand Rapids in 1986 with the intention of working five years at Old Kent Bank to build up my resume and then go back home. Grand Rapids has turned out to be a wonderful area to live.”

Four years after the pair founded the wealth management group at Old Kent, Walker moved to Grand Bank to work as a senior investment officer. Prevette stayed with Old Kent and then, after that, with Fifth Third from whence he took early retirement.

After establishing Legacy Financial, Walker said, “we were presented with the opportunity to become a state-chartered bank to do trust services only.”

They are starting with a staff of seven that they hope to raise to perhaps a dozen in the next few years.

“When I left Fifth Third,” Walker said, “we had something like 20 people in the wealth management department and were managing assets in excess of $1 billion.

“Our goal over seven years is to get to about half that and we would expect our staff to be slightly bigger than half of what Fifth Third had when I left. We will always keep our ratio of relationship specialist to client at a lower lever than what the big banks can.”

They received initial approval of their state charter on Christmas Eve. Shortly after that the state bank examiner paid them a visit. Last week they held their board meeting and planned to drive the minutes to Lansing in hopes of receiving their charter this week.

Walker said that in wealth management, Legacy would operate with what he called “open architecture.”

He explained that larger banks manufacture their own investment processes and have all their investment products and personnel on site and in house.

“Our design basically is to outsource the individual management of the portfolios,” he said.

“If a client is wanting to have a stock portfolio designed, we assist them in the design and policies as to how that should be built. But then we find some of the best managers regionally or nationally to perform those investment functions.

“The client has a lot of opportunities for investments and isn’t confined to four walls of the organization.”           

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