Legg Mason opens own trust company Firm will target rich, institutions

February 20, 1993|By Ian Johnson | Ian Johnson,New York Bureau Bloomberg Business News contributed to this article.

NEW YORK -- In further broadening of its business, Legg Mason Inc. has opened a trust company for wealthy individuals and institutional funds.

The final approval for the Baltimore-based firm, known as Legg Mason Trust Co., came yesterday when Maryland Banking Commissioner Margie H. Muller gave the company its certificate of authority. "Their financing was sound and they met all our requirements," Ms. Muller said.

Art Sims, who heads the new unit, said Legg Mason had known for several years that it wanted to open a trust company but was unsure exactly how to enter the trust business. After ruling out the purchase of another trust company, Mr. Sims said, the company decided to open its own.

The new company has three employees, Mr. Sims said, but will draw on Legg Mason's brokers and its base of 200,000 customers to funnel prospective clients to the trust. The initial idea is to serve the wealthy individuals and entrepreneurs who may already be affiliated with the company but also need the services of a trust.

Trust companies act as agents for individuals or businesses in a variety of financial matters. Services usually include client counseling on financial objectives and asset management, maintenance of detailed financial records, tax and estate planning assistance, safekeeping of assets and personalized handling of living trusts, testamentary trusts, guardianships and

estates.

Targeted customers will generally have assets in the $550,000 to $5 million range. Although the company would be able to serve larger clients, Mr. Sims said he did not expect primary customers to be the huge pension plans of very large companies. Thus far the company has no clients, he said.

Mr. Sims said Legg Mason hoped to have several hundreds of millions of dollars under management in the first two to three years of operation.

Legg Mason has been a leader among security firms in diversifying its business to complement its more volatile brokerage earnings. The trust is expected to generate stable fees that do not swing with investor interest in the stock market.

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