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CARLSBAD, Calif. – Of XCU Capital Corp.’s 42,000 retail clients, it doesn’t come as a surprise that not a single trust service relationship has been established with any of them since the credit union-owned broker dealer partnered with Phoenix National Trust in November 2002. Mark Allen, president/CEO of XCU Capital is quick to say he’s not disappointed with the outcome given the nature of the trust business and the firm’s strategic move to not market the services aggressively. “Quite frankly, there has not been a great demand for these type of services,” Allen said. “Our reps are very entrepreneurial and if they felt or saw a need to offer trust services, they would not pass the opportunity by.” XCU Capital provides investment and insurance services to 27 credit unions and has $1.4 billion in assets under management. It recently added four credit unions to its list of shareholders bringing the total number of owners to 17. Hartford, Conn.-based Phoenix National Trust is an indirect wholly owned subsidiary of The Phoenix Companies, Inc., providing administrative, trust, custodial capabilities and other fiduciary services to high-net-worth individuals, senior corporate executives, business owners, and not-for-profit organizations. In March, Linsco/Private Ledger, a brokerage firm that counts credit unions among its clients, signed an agreement to acquire The Phoenix Companies Inc.’s retail broker/dealer operations allowing for wider accessibility to life insurance, annuity and asset-management products and services. Allen said the company is exploring additional partnerships with other industry entities to offer trust services. “We like to give our clients choices,” he said. “We realize that one size doesn’t fit all. Some (entities) may be similar in services but each one has something that sets them apart from the others.” So far, XCU Capital has met with Arrowhead Group, the wholly-owned subsidiary of Arrowhead Credit Union to put together an agreement to offer “piggyback” trust services, Allen said. The alliance, which would be similar to the one XCU Capital currently has with Phoenix, is set to be complete in the next month or so. Allen has also talked with MEMBERS Trust Co., the nationally-chartered trust company owned by Suncoast Schools Federal Credit Union and CUNA Mutual Group. “We’re very interested but there are some concerns from clients,” he said. Those concerns – having ownership of accounts over the long term and all assets going into MEMBERS Trust fund – are still on the table at this early stage of discussion, Allen said. “We’ve had some informal conversations, we haven’t said we’re not going to do it but those two concerns need to be addressed before we can proceed,” he added. “We realize that this is still new to (MEMBERS Trust) and they’re still rolling it out.” XCU Capital’s close relationship with Hartford Financial Services Group, Inc. is also being considered as a choice for trust services as is a partnership with Mountain America Credit Union’s trust services division set to launch in mid-April (see related story on this page). While Allen said the jury is still out on whether “the average credit union member is the perfect candidate for trust services” the industry still has an appealing alternative to offer. “There is certainly a need there but the key is being able to target that need,” Allen said. [email protected]

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