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Business Observer Friday, Sep. 23, 2022 2 months ago

Two ambitious businesswomen deliver new dynamic to Florida’s trust industry

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Florida’s small but mighty trust industry is in a prime spot to capitalize on generational wealth transfer trends. A new, trailblazing entry into the space has big plans, too
by: Mark Gordon Managing Editor

Katie Pemble and Gentry Barnett Byrnes have individually climbed to the top of some steep career mountains over the past 30 years — along the way developing a tight-knit, finish-each-other's sentences kind of friendship.

Pemble was Pinellas market president for Bank of America and later president of what was St. Petersburg-based C1 Bank before Bank of the Ozarks acquired it in 2016 for $402 million. She left C1 in 2015, but stayed close to the banking industry, getting into financial and wealth management and earning a certified financial planners license. Barnett Byrnes, meanwhile, is an attorney. She started her career with a focus on elder law and estates, before shifting away from the law and into the trust business. She held leadership posts in trust units at Bank of America and Wells Fargo before being named chief fiduciary officer of Raymond James Financial in 2013. Assets under management at the Raymond James trust unit grew from $2.5 billion to $8.5 billion under Barnett Byrnes’ leadership, when she also opened three offices outside Florida. 

Katie Pemble (Courtesy photo)

One thing the pair of accomplished businesswomen had never done? Start a business together. That includes a trust company, which is regulated by the state to handle fiduciary services for clients for investment management, wealth strategies and trust administration needs. And, it turns out, in something of surprise to the pair, no women in Florida had ever founded or run a trust company before, either. That makes the duo’s entry in the field — St. Petersburg-based Adelphi Trust Co. — a milestone for both Pemble and Barnett Byrnes and the trust industry. 

Adelphi, which in Greek is traced back to “of the same womb,” or family of the same ancestor, officially opened for business Aug. 12. “We think we are at the right time for women to be in this space,” Pemble says in an interview in the firm’s office on the 12th floor of the City Center building in downtown St. Pete. 

“Our focus with our clients is planning with and for the entire family; multiple generations,” Pemble, 57, adds in an email. “So Adelphi seemed perfect to us to capture our family focus and with a clear nod to the femininity of its creation.”

Gentry Barnett Byrnes (Courtesy photo)

Barnett Byrnes adds that on a personal level, starting a trust, as opposed to continuing to grow one at Raymond James, has opened a new level of passion for the industry. “The trust space is where you can really build relationships with clients,” says Barnett Byrnes, 54. “I’m working harder than I’ve ever worked in my career, but I’m having more fun than I’ve ever had in my career.”

 

Big ideas

While the Adelphi founders are proud of their trailblazing status, they are also confident they can compete against any entity in the small — yet highly profitable — trust company sector in Florida. There’s 12 other registered non-depository trust companies in Florida, data from the Florida Office of Financial Regulation shows, a list that doesn’t include banks with trust divisions. “There’s just not a lot of us,” says R. G. “Kelly” Caldwell, CEO of Venice-based Caldwell Trust Co., which was founded in 1993 and has some $1.4 billion in assets under management.  

Seven of Florida’s independent trust companies, now including Adelphi, are based on the west coast of the state. Nine of the 12 operational in 2021 were profitable, according to OFR quarterly reports. 

Adelphi projects it will hit profitability by 2025, in year three. Its strategy to get there, to a large extent, is to go where competitors aren’t going. One example: some trust entities, both independent and units of big banks, only take clients with $15 million or more in assets. Some set a baseline of $30 million. Adelphi plans to focus on the underserved $1 million to $10 million market. 

Pemble, the firm’s CEO and board chair, and Barnett Byrnes, the chief fiduciary officer, each invested $260,000 into the startup phase of Adelphi, with 4.6% ownership stakes. They also have 43 investors who contributed $5 million, including a nine-member board of high-powered Tampa and St. Pete business leaders. Adelphi officials declined to disclose financial projections for assets under management or other metrics. The firm, through mid-September, had four people on its management team, with plans to add one more in the first quarter of 2023. 

 

There for you 

The trust industry might be small in Florida, in terms of the number of companies that do it on an independent basis, but it's big in volume: billions in assets were held in the state’s 12 trust companies through the end of the first quarter, according to OFR data. 

Caldwell says that figure is primed to grow significantly, both at his firm and in the industry. One reason, he says, is small banks have, for the most part, dropped or scaled back on trust services in the past few years. That’s largely because it’s not a core competency and requires too much work and expense. Most large and regional banks have trust departments, but in many cases, Caldwell says, those units have turned into afterthoughts as many institutions focus on other services that can turn a profit quicker. 

Caldwell Trust Co. recently moved into a new building in downtown Sarasota. (File photo)

Finally, banking industry consolidation has left many customers frustrated with no go-to person to call. That leaves a gap for people and families with multimillion-dollar accounts who seek a financial partner with consistency, Caldwell says. “We’re going to be here for you,” he says, “while the big banks might send you to 1-800 land.”   

Caldwell says one key to the success at his firm, founded by his dad, Roland Caldwell, has been in getting internal infrastructure in place before a growth surge — an important, but tricky, balance. It’s why seven of the company’s 40 employees are in non-revenue producing IT roles, so the company stays ahead of technology. As it steers toward $2 billion in assets, Caldwell has sought to do the same thing with operations, compliance and in leadership, bringing in senior leaders so he’s no longer mired in day-to-day tasks. “Everytime you grow as a company you have to take the next big leap,” in the core aspects of what has made the company successful in the first place, he says. “And we have been able to take those steps.”   

The biggest challenge Caldwell Trust Co. faces, says Caldwell, is the same one that other trust companies are grappling with. Same as just about any other industry: recruiting and retaining top talent. “The pool of talent isn’t there,” says Caldwell. 

 

Fast paced

Pemble and Barnett Byrnes haven’t faced the staffing challenge in a big way — yet. 

RIght now the pair is more focused on the market opportunity — which they see in multiple layers. One big one is the sheer volume of wealthy residents moving to Florida. A recent study from data firm SmartAsset, for example, found that the Sunshine State gained 20,263 high-income households, even before the pandemic. New York and California, respectively, have lost 19,912 and 19,299 high-earning individuals and families. 

In addition, Pemble cites studies, from Mckinsey & Co. and others, that show baby boomers are projected to transfer $70 trillion to Gen X and Millennials between 2018 and 2042. “The demographics of wealth are changing dramatically nationally and in Florida, and the pace of that change is projected to increase exponentially over the next 20 years,” Pemble says. 

To seize the opportunity in that shift, Pemble and Barnett Byrnes say they intend to build Adelphi a bit differently than some more established firms, especially in terms of marketing and outreach. “For years, much of the marketing we have done is eyeball to eyeball,” says Pemble.

But they are plowing ahead into the digital generation, knowing they need to meet customers where they live and spend time.. “Social media can be a cost-effective way to get our name out there,” Pemble says. 

The idea for Adelphi isn’t just based on market need, or finding a better way to do trust management, or even being the first women to launch a trust business in Florida. The idea also stems from a kinship Barnett Byrnes and Pemble share. Many years ago they worked in the same building in St. Pete, with different companies. Pemble says she would often call Barnett Byrnes for legal and technical trust questions. 

Then, during the early days of the pandemic, the pair would take Saturday walks around parks in St. Pete. “We talked about if we were to start a business, what it would look like,” Barnett Byrnes says. 

Next up were conversations around Pemble’s dining room table, chats that were essentially visioning sessions. They mapped out everything from compliance and customer service to operating systems and risk mitigation. One quick agreement: spending more money on IT infrastructure in the beginning was better than being caught without what they needed down the line. 

The passion for Adelphi, and working together, has grown from those walks and dining room talks to now the new office. Florida Office of Financial Regulation officials visited the office Aug. 12 to drop of Adelphi's charter in person. It was a meaningful moment for both Pemble and Barnett Byrnes, as they reflected back on their careers while looking ahead to building something of their own. “Both of us,” Pemble says, “have a real entrepreneurial spirit.”  

Mark Gordon is the managing editor of the Business Observer. He has worked for the Business Observer since 2005. He previously worked for newspapers and magazines in upstate New York, suburban Philadelphia and Jacksonville.

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