Investment Advice for Trustees
Since the introduction of The trustee Act 2000, trustees now have specific obligations concerning the serving and admin of trust funds. The responsibility is applicable to lay and professional trustees. However higher standards are expected from professional trustees.
A statutory duty of care is applicable to the trustee investment funds that are contained within the trust. For new or existing trusts, the trustees must take into consideration the trusts objectives and the suitability of the investments to be held.
Trustees have a duty to protect the value of the trust fund, whilst providing income for the beneficiaries. It is essential for trustees to consider the suitability of the investments held, funding, the type of trust arrangement and the demands of the beneficiaries.
A diversified portfolio of assets should be used to meet the trusts special objectives.
This approach can help to limit the volatility within the trust investment funds by placing across individual asset categories. It is important to take into account risk any specific prerequisites of the trustees. This could also include investing in an ethical or sociably responsible style.
Trustees have an administrative responsibility to review the assets held within the trust on a regular basis. This can be a drawn-out and protracted process, especially if the trust administrators are not veteran investors.
Trusts and Independent Financial Advice.
It is important to seek individual and impartial advice on the assets held within any form of trust agreement. We regularly advise existing and new trustees on suitable asset allocation investment strategies.
Trustees frequently engage the investor functions of a bank or stockbroker. Occasionally the service is not specific to the demands of the individual trust. A one size fits all philosophy may not take into consideration the individual needs of the trust. For Instance, the demands of a large educational trust might be different to a small family trust.
The costs to administer the investment funds are an important component. The admin fees charged by stockbrokers and banks for trust investment advice can be high. This could have an effect on the investment returns the trust can attain.
Our investment procedure takes into account the costs, as this is a known factor when we recommend particular investment funds.
If as trustees you are thinking about investing it is fundamental to remember that the value of the trust investment and the income generated could fall as well as rise. There is no guarantee you will get back more than you vested.
Consilium Asset Management are based in Chipping Sodburychipping Sodbury and offer a unique Trustee investment management service for individual and corporate trusts.
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