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Walker Banks On Trust
Walker has more than 26 years of investment management experience in bank trust, 12 of them with former Old Kent Bank. He started at Old Kent as trust portfolio manager, and within a fairly short time was promoted to director of portfolio management, where he supervised six trust portfolio managers and managed the bank’s largest corporate and personal investment clients.
“I was named director of portfolio management at age 29, which put me in front of some of the bank’s largest corporate and individual clients,” he recalled. “I don’t know too many 29-year-olds who have that opportunity.”
Name: William A. Walker
“It was our first bite of the entrepreneurial apple: The bank allowed us to build a business within a corporate structure, and it was a novel concept for banks at the time,” he recalled. “They allowed us to use some non-traditional, innovative solutions. It was very creative and very fun, and it was hugely successful.”
Walker left Old Kent in 1998 to take a senior investment position in the trust department of Grand Bank, which didn’t have its own internal investment capabilities at the time; it was an opportunity for him to build something from scratch once again.
“I thought it would be an opportunity to step in and apply to a local company what I’d applied at Old Kent,” he said. “A small bank is a lot different from a large bank — you have to do a lot more because the vast resources of the big company are not there. It was a challenge, and it paved the way for the day I did decide to do something on my own.”
Later, when Macatawa Bank acquired Grand Bank, Walker concluded that it was going to become a different organization, so he took the ultimate leap of faith and started a management investment company — Legacy Financial Advisors — in January 2002. Prevette joined him as a partner in Legacy Financial Advisors later that year. They concentrated initial efforts on former clients and began some targeted marketing initiatives to broaden awareness of the company.
It wasn’t a great year to start a bank because the financial markets were in such disarray, Walker recalled. Their long-term plan was to build up a client base, then build a bank. They soon recognized they had it backwards: They needed to build a bank to get the clientele, Walker said.
Walker and Prevette were able to raise the capital to build the bank in only about six months, and it wasn’t very difficult, Walker noted. Most of the investors were former clients or people who knew them. About two-thirds of it was raised through private West Michigan investors. The remaining third was raised through three West Michigan banks that agreed to become shareholders — United Bank of Michigan, Ionia County National Bank and ChoiceOne Bank.
“They were investing in our credibility, plus they recognized the need for a trust bank in the community,” Walker said. “They’d seen the success of the Macatawas and the Mercantiles as commercial banks, and the notion of a bank focused only on trust management was appealing. By the same token, I think they saw the opportunity to take an ownership stake in their own service provider so they could have some control over who was providing those services over the next 10 or 15 years.”
Walker and Prevette established Legacy Trust Bank in January 2004. It offers trust services (and nothing but trust services) to high-net-worth individuals and families, private foundations and charitable organizations.
The bank has experienced steady growth since then, from $20 million in assets under management in 2004 to $250 million today. The opportunities for growth are still out there, Walker said. The goal for the next three years is to grow the bank from $250 million in assets under management to $500 million.
Walker said the implicit goal in five years is to be “the top-of-mind first thought when someone asks for the best money manager in Grand Rapids.” The bank now has a staff of nine full-time and two part-time people. Most of its clients are West Michigan based.
Legacy Trust is a thoroughly seasoned business now, Walker said. The chance of it not being here five years from now is very minimal, and that creates a greater comfort level among prospective clients, he added.
“The reason we chose to organize as a bank with trust powers is because most of our non-bank competitors don’t have that ability, so when a family wants to pass wealth down to the next generation via trust, they have to find a third party to do it. That’s what separates us from the non-bank competition,” he said.
The majority of Legacy Trust’s business today is driven by referrals. Early on, Walker and Prevette wore many different hats simply because they had to, but as the business grew, their roles became more defined. For several years Walker’s main role was overseeing the entire investment management apparatus. He still works with some of the bank’s most significant accounts, but he has now stepped into more of the business development role for the bank.
“It’s really about going out and telling our story, explaining why our business has been successful and why our services can be of benefit to individuals and families,” he said. “Our clients are seeking local ownership and local decision making. We differentiate ourselves by the attention we give to customer service. We have to continue to build our business in such a way that honors and upholds that core element of our service model.”
Walker said his job allows him to be creative and gives him ample opportunity to work with talented people. Looking back, he’s glad he followed his instinct five years ago and filled what he felt was a vacancy in the local marketplace.
Judging by Legacy Trust’s success, he thinks he and Prevette made a pretty good judgment call on that.