New hire’s Capital idea: Target high-end advisers

Matthew D. Mason III thinks of his recent stint at SEI Private Trust Co. in Oaks, Pa., as a lost year because the parent company, SEI Investments Co., never made selling trust services a priority.

“They had a soft launch, and I should have seen the handwriting on the wall,” he says.

So Mr. Mason is determined that his new employer, Capital Trust Company of Delaware, avoid making the same mistakes. He joined the Wilmington-based company in late September.

“It’s a tough market,” he says. “Trust accounts have to be sold; they aren’t bought.”

Selling trust services to financial advisers is Mr. Mason’s primary objective in his new job as vice president of new-business development. He replaces Daniel E. Drennen II, who resigned. Before joining SEI, Mr. Mason was senior vice president and personal-trust product and sales manager with Morgan Stanley Trust FSB in Jersey City, N.J.

Jeffrey R. Lauterbach formed Capital Trust in 1999, shortly before Charles Schwab Corp. of San Francisco acquired U.S. Trust Corp. of New York.

He pitched his firm to independent financial advisers as an alternative to U.S. Trust for offering trust services to clients. TD Waterhouse Institutional Services of New York has a formal marketing collaboration with Capital Trust on behalf of its advisers.

Capital Trust is starting to post better asset-gathering results after a couple of slower years. Its assets jumped to more than $700 million in November, from $490 million at the start of the year, Mr. Lauterbach says.

To avoid a repeat of what he says happened at SEI, however, Mr. Mason is pressing his case for adviser selectivity to Mr. Lauterbach, who is chief executive of Capital Trust.

“Jeff had a vision of serving all advisers,” Mr. Mason says. “Where are you going to make the money? It’s with the people who have the money.”

Many advisers who oversee the big bucks are with broker-dealers, and Mr. Mason says he is starting to form greater ties to those companies.

MARKETING TRUST TO ADVISERS

Mr. Lauterbach, who like Mr. Mason is a former executive of Wilmington-based American Guaranty and Trust Co., says he hired him because of his tenure in the business.

“We really liked his experience at working with financial advisers in a trust context,” Mr. Lauterbach says. “It’s a difficult combination to find.”

It’s also a fine distinction.

“My market has always been the adviser as opposed to the direct market, like a U.S. Trust or a Northern Trust ,” Mr. Mason says.

Marketing trust services through broker-dealers, however, is no easier than selling liquor at a food store.

“It’s tougher than the retail trust business because you have to convince advisers to provide shelf space in their business,” Mr. Mason says. “It’s not a traditional part of their services.”

The lesson learned in his experience, however, is that all advisers are not created equal.

“A broker-dealer wants you to talk to everyone, even if they’re wasting your time,” Mr. Mason says. “Qualifying [prospects] is key.”

Also key to his vision for ramping up the trust business is creating a system for processing trust business in volume.

Mr. Mason says he has worked to simplify the process of marketing to clients and establishing customer accounts.

He also is working to develop a niche for his company.

“We need to understand the competition, and we want to develop a focus,” Mr. Mason says.

That focus has already begun to emerge, he says. Because Capital Trust sells trust services exclusively, Mr. Mason doesn’t have to contend with conflicts created by investment management services that might threaten the position of the financial advisers he is selling to.

“There’s a lot more flexibility,” he says.