Strategic Philosophy


“Success is a science," observed Oscar Wilde. "If you have the right conditions, you get the result.” At Legacy Trust, our investment philosophy is very similar. Through knowledge of our families’ situation and needs, objective analysis of asset allocation strategies, and extensive evaluation of investment managers, we create the right conditions for your success.

In addition to science, successful investing also has an element of art. At Legacy Trust, the art of investing resides in the expertise and judgment of our investment team, which designs the right allocation strategy for each of our families, based on their risk tolerance, time horizon, desired return and overall wealth objectives.

When the right asset allocation plan is in place, we don’t buy and sell stocks, bonds and other assets to achieve the plan’s objectives, but we do select the world’s best portfolio managers to achieve desired results. All of our manager recommendations are based on a “best of” strategy where the only two criteria are performance and whether the investment fits within the overall portfolio objective.

Through this blend of rigorous academic analysis and expert investment judgment, we have created portfolios for our clients that have outpaced the markets with time-weighted returns.


Asset Allocation

Legacy Trust’s investment experts believe that proper asset allocation is the key to designing portfolios that will achieve above-average performance in all market conditions and provide a balance of risk and reward suitable to each family. That’s not particularly surprising. Most financial planners and investment professionals believe the same. But what sets Legacy Trust apart is the rigor we bring to our allocation analyses and the expertise we have gained through many years of experience.

Drawing on extensive research in asset allocation modeling, we utilize statistical techniques to estimate expected risk and return profiles of various asset allocation alternatives and to test their sensitivity to changes in assumptions. This process reveals an “efficient frontier” of portfolio allocations that offer the most effective mix of assets to provide maximum return for any given level of risk.

Effective asset allocation cannot be based on quantitative analysis alone, however. A qualitative element must also be involved, and that element is our expertise. Legacy Trust’s experts understand the variability of asset class definitions and the impacts of structural changes, unusual events and market liquidity factors on historical data. And we adjust our asset allocation recommendations accordingly.

When the quantitative analysis has been performed and the qualitative factors have been considered, we arrive at an allocation that’s best suited to our individual families, based on their risk tolerance, time horizon, desired return and overall wealth objectives.


Manager Selection

As part of our commitment to providing the most effective investment solutions for our families, we employ a rigorous evaluation process of the industry’s best investment managers. The objective of our five-step search and selection process is to identify superior investment managers whom we believe are representative of a given asset class and have a high probability of repeating their excellent historical performance.

To narrow the field, we screen managers based on the historical returns of their portfolios and their “style,” or their stated objectives in terms of their assets and their deviation from their objectives. Each remaining manager’s portfolio is evaluated based on an exhaustive array of quantitative risk measurements as well as on the qualitative basis of organizational history and stability, experience of investment team and research group, investment process and strategy, and legitimacy of the manager’s track record, among other characteristics.

After we select a manager to handle our families’ investments, we continually evaluate the manager’s performance. We meet or speak with every manager throughout the year, and every selection factor is reviewed and scrutinized. Lastly, we run a tightly controlled “watch list,” with all manager-related decisions reviewed and ratified by our Investment Committee at least once a year.

We take our fiduciary responsibility to our families very seriously, because your success is our success.


Performance Reporting

Another aspect of Legacy Trust that differentiates us from other financial services providers is the quality, frequency and usefulness of the reports we provide to our families. Our proprietary information technology systems measure the performance of each family’s total portfolio against appropriate market indices as well as against returns of comparable managers.

Our systems allow us to customize reports and reporting processes that can accommodate multiple fiduciary requirements or personal requirements, such as time and dollar-weighted returns for multiple periods, measure of risk and risk-adjusted returns, diversification and appropriate manager comparisons. All returns are presented gross and expenses.

We also provide consolidated reports that include all investments, even those assets that are not under our direct advisement. We provide a timely, detailed, comprehensive reporting package including a summary of all of your investments. In a clear, concise format we provide portfolio returns, manager and index comparisons, tax reporting and gains and losses reporting.