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MANHATTAN BEACH, Calif. – It’s still hard to pinpoint the number of credit unions that offer trust services, but not as many ventured into trust services this year compared to 2004. The industry even saw a few unexpected shutdowns. The $2.9 billion Kinecta FCU announced it would start offering its members trust services through its subsidiary, Kinecta Financial & Insurance Services, LLC. As the case with many credit unions, the new division aims to target members with a minimum of $100,000 in assets, far below the $1 million that many banks require, industry experts contend. The $764 million State Employees CU in Lansing, Mich. was one of several credit unions that partnered with MEMBERS Trust Co. this year. MEMBERS Trust is the country’s first credit union-owned, nationally chartered trust firm. The latest stats from the two-year old firm show agency and representative agreements with 44 CUs and a total of $137 million in assets. There were some casualties this year. The Delaware Credit Union League announced in July that it would end its alliance with INA Trust, fsb due to a lack of interest from the state’s credit unions. The league’s DELCU Financial Services, LLC formed the partnership with INA Trust nearly four years ago. One of the difficulties in getting credit unions interested had to do with the challenge of wooing members who had already established relationships with other trust firms, according to the league. INA Trust even lowered its minimum asset requirement to $250,000 but to no avail. The alliance was set to disband by the end of this year. Another unexpected casualty came from $926 million Arrowhead CU. After 10 years in business, its Arrowhead Trust Inc. said it would shut down after several years of lackluster profits. In early November, it took a step in that direction by selling its self-directed individual retirement account assets to Fiserv Investment Support Services, a unit of Fiserv, Inc. The transfer of 1,063 accounts valued at approximately $48 million in assets took place Nov. 4 and held both traditional investments such as mutual funds and alternative investments such as private equity, real estate, mortgages and trust deeds. Meanwhile, other veteran players such as Alaska USA Trust, continued to expand. The wholly-owned subsidiary of $2.4 billion Alaska USA FCU made several key promotions this year and saw its assets under administration go well above the $3 billion mark. Still, credit unions continue to seek out a number of ways to sell trust services to members. FORUM 1st Trust Services has advocated cross-selling the services to small business owners. The $912 million FORUM CU purposely designed the location of its business lending and trust and investment departments so they are in close proximity to each other. The head of FORUM 1st Services also sits on the business loans committee. For the five Iowa credit unions and one Illinois CU that partnered with First Community Trust Bank, N.A. in 2001, the trend has been customers shifting their estate plans so that the credit unions can serve as executors or trustees. -

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