When Managing your Investments, Bigger Doesn’t Always Mean Better


Successful investing can be fulfilling and gratifying. However, doing so is largely determined by the quality of advice you are given and who helps you along the way.


Managing your money can be confusing. Because many people do not understand the ins and outs of money management, they entrust their money to investment experts. While people naturally look to brokerage firms and large national banks, community banks often provide a surprisingly welcome option.


All three have benefits, but as national banks have grown exponentially, some investors have turned to community banks to receive the same custom personal service they once were accustomed to.


Here are four reasons why investors may consider contacting the asset management group at their local community bank to see if it is a fit to manage their investment portfolio:


  1. 1.     Unbiased decision-making


Many banks managing investments for their clients act as a fiduciary and thereby have a legal duty to act solely in their interest. This sounds like something one would expect from any financial advisor, but some models are not held to the same fiduciary standard, such as outside brokerage firms that reward brokers who sell particular products or those that do not provide continuous advisement to ensure a particular investment remains suitable given client or economic circumstances.


  1. Lower account minimums


In most cases, community banks require smaller account investment minimums to begin an investment management or trust relationship. Large trust companies, national banks and other financial service companies can start their account minimums at amounts reaching as high as $1 million or more. Community banks often have more reasonable account minimums.


  1. 3.     Personal relationships


Community banks value personal lasting relationships. Their representatives take the time to sit down and discuss a client’s goals, giving them personal and individualized management services. It is not uncommon for larger brokerage firms and larger banks to outsource “smaller accounts” to call centers. Clients that want to ask questions and receive information about their money and investments might need to call a 1-800 number, which could direct them to a different service representative each time. Meeting face-to-face with your local investment manager helps create a relationship and a sense of comfort that your accounts are receiving the attention they deserve. 


  1. 4.     Highly competitive


At some community banks, funds invested are typically managed by independent advisory firms that ensure professional management of client funds. This allows community banks to offer competitive investment options and cost structures.


Because of unbiased investment management, lower account minimums, personal relationships and competitive investment options and cost structures, community banks are an attractive option for investors. The next time you are visiting your local community bank, make an appointment to sit down with a member of the asset management and trust team. The perfect investment manager for your portfolio might just be the community bank right down the road.


William Evans is a Trust & Estate Manager and Senior Trust Officer for ESSA Bank & Trust. He is a graduate of Millersville University and the National Graduate Trust School program of the American Bankers Association where he became a certified trust and financial advisor in 1996. He can be reached at wevans@essabank.com.