In Perspectives

I love seeing my family and friends when I return to my hometown for a visit.  Most have a general idea of what I do, yet some think of me as either a banker (“what are you paying on CD’s these days”) or a broker (“got a hot stock tip for me?”).   However, I believe most understand that I work with investments and have built a business serving the needs of people like them.

It is not uncommon for some to ask my advice when I am home.  At a family dinner on my most recent trip, Uncle Phil (the name has been changed to protect my good standing in the family) asked for my opinion on getting completely out of the stock market until after the election, or “until things get better.”  Now keep in mind, offering advice requires a comprehensive knowledge of the individual’s situation – goals and objectives, assets and debts, sources of income and spending habits, plans for retirement, risk tolerance, etc.  Diving this deep into his question would likely have gone well past dessert and into the wee hours of the morning.

But he wanted my opinion, so I carefully posed a follow-up question to him: “How do you define when things are better?”  I think the question caught him off guard, so I added “Would you like to see the market rising before getting back in?”  Without hesitating, he responded “Well, yes!”  So I explained that once the market had advanced sufficiently for him to have the comfort to invest, he likely would miss a meaningful contribution of long-term gain needed to meet his retirement needs.  “Uncle Phil, this is called opportunity risk and you cannot manage this risk other than by staying committed to your investments for the long-term.” He winked and then offered his thanks for the feedback.  Whether he will take the advice is another story.

My cousin Ben, who we lovingly refer to as “Cowboy”, then jumped into the conversation and shared that he was considering cashing in all of his investments and adding the proceeds to a single annuity paying 4 ½% that was guaranteed for the rest of his life.  Boy, this onion had many layers to it and I wasn’t sure if I had the brainpower to tackle it after a long day of driving.

I told Ben that the rate appeared to be very attractive compared to other alternatives and could understand its appeal.  However, “Ben, all of your eggs will be in one basket.  You will be lacking diversification and assuming the risk of a single insurance company.  Is this company highly rated?”  I added, “Also, what would happen if inflation were to rise in the coming years?  Would the annuity rate rise with inflation or be fixed at the quoted rate, resulting in a diminishing return after inflation?”  Ben didn’t know, but committed to look into these risks of the product before taking action.

I cherish time with my family and friends and am honored when they seek my advice.  Their concerns are real and impulses not that uncommon.  However, there will never be the perfect solution and if I have helped them by pointing out risks that may not have been that apparent, then I consider it a rewarding trip home.

Legacy Trust and Your Right to Financial Privacy

At Legacy Trust we have established policies and practices that respect the financial privacy of all individuals who use our trust company. We believe it is critical to comply with the laws and regulations designed to secure your financial privacy. Your relationship with us as our client is very important to us, and we want you to understand our policies and practices about handling your information.

This Policy applies to you – This Policy applies to our relationships with individual clients who inquire about or obtain products or services from us for personal, family and household purposes.

Strict security measures – We take the security of information very seriously. We have established security standards and procedures to prevent access to client information. We maintain physical, electronic and procedural safeguards to guard client information.

Limited employee access – We have established procedures to limit employee access to information to only those employees with a business reason for accessing such information. We educate our employees about the importance of confidentiality and client privacy. We take appropriate disciplinary measures to enforce employee responsibilities regarding client information.

Why we collect information – We collect information about you to:

  • accurately identify you;
  • protect and administer your records, accounts and funds;
  • help us design or improve our products and services;
  • understand your financial needs;
  • save you time when you apply for new products and services; offer you quality products and services; and comply with certain laws and regulations;

We collect information – We collect and maintain your personal information so that we can provide investment management and other services to you. The types and categories of information that we collect and maintain about you include:

  • Information we receive from you to open an account or provide investment advice or other services to you (such as your home address, social security number, telephone, financial information and investment objectives).
  • Information that we generate to service your account or from our transactions with you (such as account statements and other financial information).
  • Information on your transactions with nonaffiliated third parties.

We have established procedures so that the financial information we collect is accurate, current and complete. We are committed to work with you to promptly correct any inaccurate information.

Our selective sharing of information – In order for us to provide investment management and other services to you, we do disclose your personal information in very limited instances, which include:

  • Disclosures to nonaffiliated companies as permitted by law, including those who help us service your account (such as providing account information to brokers and custodians).
  • Other limited disclosures as permitted by law, for example, required reports to government entities.

We do not share your information with third parties for marketing purposes. We do not sell your information.

Former clients – If you end your relationship with us, we will continue to adhere to the privacy policies and practices described in this notice.

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USA PATRIOT Act

Important Information About Procedures For Opening A New Account

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.

What this means for you: When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

We apologize for any inconvenience this may cause; however, federal law prohibits us from waiving these requirements.

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