Magazine article American Banker

Prudential Forays into Personal Trust Services

Magazine article American Banker

Prudential Forays into Personal Trust Services

Article excerpt

Prudential Securities Inc. is joining the ranks of brokerages expanding into personal trust services, once a stronghold for banks.

The New York-based securities firm, a subsidiary of Newark, N.J.-based Prudential Life Insurance Company of America, has recruited Michael F. Fernon, a trust executive from Merrill Lynch & Co., to be director of personal trust services.

It has also retained the private asset management division of Mellon Bank Corp., Pittsburgh, to act as administrator for Prudential trust clients.

Prudential Securities already manages $30 billion of personal trust assets for affluent clients who have appointed people, such as close relatives or friends, as their trustees.

Now Prudential wants to persuade those clients to appoint the firm as their trustee. Prudential obtained trust powers in 1994 through its Atlanta-based federal savings bank.

"That is the obvious first step of our marketing approach," said Mr. Fernon, a first vice president who started work at Prudential Securities this month.

Though clients chose not to use an institutional trustee in the past, they could be amenable to working with Prudential, he added.

"There may have been a historical dissatisfaction with the banks," he said. "There's certainly in every brokerage firm a big marketing opportunity to look at that existing client base and to work with them on a corporate trustee level."

That tactic combined with efforts by Mr. Fernon to get clients to name Prudential to oversee new trusts should prove viable, said Lawrence Hughes, a first vice president and manager of wholesale trust services at Mellon. The Pittsburgh banking company started working with Prudential Securities last year.

"He's got a good background. He's very focused to develop new business, which is key to success," Mr. Hughes said.

Mr. Fernon, a 36-year-old lawyer who once was a regional manager in the trust department of National Westminster Bank's U. …

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