Investment Advice for Trustees
Since the introduction of The trustee Act 2000, trustees now have special duties relating to the serving and admin of trust funds. The responsibility is applicable to professional and lay trustees. Still higher standards are expected from professional trustees.
A legal duty of care applies to the trustee investment funds that are held. For existing and new trusts, the trustees must take into account the trusts objectives and the suitability of the investment funds to be held.
Trustees have an obligation to protect the asset value of the trust fund, whilst providing income for the beneficiaries. It is essential for trustees to think about the suitability of the investment funds held, funding, the type of arrangement and the demands of the beneficiaries.
A wide-ranging portfolio of assets should be used to meet the trusts special targets.
This approach can help to limit the risks within the trust investment funds by investing across various asset classes. It is important to take into account risk any special demands of the trustees. This could also include placing investments in an ethical or sociably responsible manner.
Trustees have an administrative responsibility to re-examine the assets held within the trust on a regular basis. This can be a long-term and protracted process, especially if the trust decision makers are not knowledgeable investors.
Trusts and Independent Financial Advice.
It is essential to seek individual and unprejudiced advice on the assets held inside any form of trust arrangement. We regularly advise existing and new trustees on suitable asset allocation investment strategies.
Trustees frequently engage the investor services of a bank or stockbroker. Sometimes the service is not unique to the needs of the individual trust. A one size fits all approach may not take into account the specific needs of the trust. E.g., the requirements of a large educational trust would be different to a small family trust.
The costs to administer the investments are an all-important factor. The admin costs charged by stockbrokers and banks for trust investment funds management can be high. This will impact on the investment returns the trust can achieve.
Our investment procedure takes into account the fee, as this is a well-known element when we advocate special investments.
If as trustees you are looking at vesting it is fundamental to remember that the value of the trust investment funds and the income generated could possibly fall as well as rise. There is no guarantee you will get back more than you invested.
Consilium Asset Management are based in Chipping Sodburychipping Sodbury and offer a unique Trustee investment management service for individual and corporate trusts.
