In Perspectives

Too often these days’ market pundits, academics, and other media outlets define risk as volatility. They continue to pound the table stating that the more violently the price of a security wiggles around on a chart the more risky it is. The thought goes that if it can be measured and quantified then it is likely useful and applicable, even to a subject matter as complex as investments. Further, with thousands of statistical studies backing this philosophy and large sums of money invested based on this philosophy it makes sense for investors to take comfort in something so widely accepted.

While volatility can be a sign of risk, it comes so very far from defining risk. Risk is more clearly defined as the probability of a permanent loss of capital, which is the risk that investors are ultimately rewarded for taking. This notion of risk, however, makes investors very uncomfortable because the probability of a permanent loss of capital is impossible to measure with any certainty, even after the fact.  For example, if we invest in exploratory oil wells that turn out to be dry and have no oil, does that mean they were a risky investment? If they turn out to hold the next largest reserves on earth, does this mean the investment was less risky when it was initially made? The risk of an investment simply cannot be quantified. If these oil wells were to trade on an open market, we may also face the risk that we overpay relative to true value.

Unfortunately, the path of least resistance continues to push investors to define risk as volatility. However, many intelligent investors continue to take the high road and discuss the probability of a permanent loss of capital as what truly defines risk in the investment world. We understand that because this is an immeasurable figure, volatility must at least be considered, but it is not what should drive the investment decision making process.

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.


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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