Most investors don’t truly know what their portfolio costs. They see a fee or an expense ratio and assume that’s the whole story. In reality, many costs are hidden – embedded fund expenses, trading friction, and overlapping fees that quietly reduce returns without ever showing up clearly.
Because these costs blend into performance, they often get mistaken for bad markets or poor timing. Returns look disappointing, but the real drag is structural. This leads investors to make changes for the wrong reasons, often adding even more complexity and cost.
Hidden costs also distort risk. Portfolios can appear diversified while holding similar exposures across multiple investments, each charging its own fee. The investor pays more but doesn’t get more protection, and the portfolio can behave more aggressively than expected when markets turn.
Tax inefficiency compounds the problem. Frequent trading and unnecessary distributions create taxes that quietly shrink what the investor actually keeps. The impact feels small year to year, but over time it permanently reduces the ability of the portfolio to compound.
Not knowing your all-in costs isn’t just about paying too much—it’s about losing clarity. When you can’t see where returns are going, it’s harder to make good decisions. Understanding costs and taxes restores that clarity and helps ensure more of your returns stay yours.
This commentary reflects the personal opinions, viewpoints and analyses of the Legacy Trust & Capital Partners employees providing such comments and should not be regarded as a description of advisory services provided by Legacy Trust & Capital Partners or performance returns of any Legacy Trust & Capital Partners client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this commentary constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Legacy Trust & Capital Partners manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.
