In Perspectives

When Money Speaks, the Truth Keeps Silent.  Russian Proverb

Judging from the number of well publicized investment swindles in recent history, it seems safe to conclude that one cannot be too careful when selecting investments or the financial advisor who will recommend them.  Despite the labyrinth of Federal and state laws designed to protect investors from illegal and unethical investment schemes, these laws have not been as successful in protecting investors from themselves.  It seems that some of the victims of these crimes may have done more due diligence when purchasing a car than when investing substantial sums of money or choosing an advisor.  From high flying hedge fund companies of the early 2000’s like Bayou and Refco, to the more recent Bernard Madoff Ponzi scandal which would make Charles Ponzi proud,  smart and successful people have been lured to financial loss and ruin on the promise of quick riches gained with little risk…the proverbial “sure thing”.

Honest financial professionals can only shake their heads in wonder at the web of lies, deceit and psychological factors that enable these frauds to succeed.   Trustworthy advisors are subjected to intense regulation and licensing requirements and live by a code of ethics that place the interests of their clients ahead of their own.  Building wealth takes hard work, expertise, discipline and patience.  Those seeking outsized returns delivered overnight will be better served at the casino.

Taking a Lesson from the Pro’s Playbook

The professional sports industry has taken important steps to insulate young, talented, high income athletes from the host of unscrupulous “investment advisors” who are eager to separate them from their new found wealth. The National Football League Players Association (NFLPA) has adopted a screening and registration process for advisors and only those that meet the very rigorous requirements are certified to the players, many of whom lack the financial experience and maturity to make prudent decisions. The application which advisors must complete is quite thorough and would be of value as a guide to anyone searching for an honest and ethical advisor.  It asks questions such as:

  • Have you ever been denied an occupational or professional license?
  • Has a final civil judgment been rendered against you for fraud, misrepresentation or theft?
  • Have you filed for bankruptcy in the past seven years?
  • Has your right to engage in “any profession” ever been restricted, suspended, withdrawn or terminated?

It further requests:

  • The details of any charges or pending complaints you face regarding your conduct as a member of “any profession.”
  • The names of three people known for five years – excluding relatives- who can attest to your character, financial experience and expertise.
  • Any commission, finder’s fee, or “other thing of value” that you receive for convincing a player to make or not make an investment.

The list goes on, but you get the idea.  The process greatly improves the odds that the players who work with an NFLPA registered advisor will not become another statistic in the record book of rip offs.  How many financial disasters might be averted by applying the same standards as the NFLPA when choosing a financial or investment advisor?  Of course, nothing is foolproof.  Con men are good at what they do for a reason.  Yet, surfacing a few red flags might be enough to give pause to consider other alternatives.

None of the victims of these fraudulent activities ever thought it could happen to them.  Anyone can fall into a carefully concealed trap.  It has happened in our own back yard more than a few times and it will happen again.  Don’t let it happen to you.

Legacy Trust is a Michigan chartered bank specializing in fiduciary and wealth management services.  The word “trust” is in our name for a reason.

“If it sounds too good to be true, then you’re dealing with an amateur con artist.” – Dennis Marlock

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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