Twilight of the Trust Departments?

For bank trust departments, Marketwatch reports in this article, the year 1999 remains the good old days:

A recent report, published by the Spectrem Group, Chicago, shows that, ironically, just as the baby boomers need trust services more trust money is leaving banks. Personal trust assets held by U.S. banks fell 10% to $986.2 billion in 2005 from a peak of $1.1 trillion in 1999, it says.

And that's not the worst of it, according to another story on the Spectrem study from InvestmentNews.com.

The managed-trust assets at banks totaled $704.3 billion at the end of 2005, down 25.6% from their 1999 peak of $946,391, according to the study. Meanwhile, non-managed-trust assets at banks climbed 89% to $281.8 billion from 1999 to 2005.

"It appears while individuals still need a trustee/custodian, they did not want a bank to manage assets," the report stated.

The Spectrem report also indicated "the number of personal-trust accounts held by banks dropped more than 23% to 719,658 in 2005, from a peak of 940,961 in 2002."

Unlike Andy Roddick at the U.S. Open, seems like bank trust departments just can't get their mojo back.

How can trust departments best reach Boomers?

Do smaller regional and community departments have a better chance than departments at the megabanks?

Should bank trust departments follow Roddick's lead and seek guidance from tennis guru Jimmy "Jimbo" Conners?

While you ponder those questions, take consolation from this comment by MarketWatch editor Steve Kerch:

The baby boomers most likely to use estate-planning services today may not respond to the stodgy image of a bank and trust. But they probably don't mind the stodgy way that their inheritances have been preserved there.