Trustee Investment
Since the introduction of The trustee Act 2000, trustees now have particular duties relating to the services and admin of trust funds. The responsibility applies to professional and lay trustees. Still higher standards are expected from professional trustees.
A statutory duty of care applies to the trustee investment funds that are contained within the trust. For existing and new trusts, the trustees must take into consideration the trusts aims and the suitability of the investments to be held.
Trustees have a responsibility to protect the asset value of the trust fund, whilst offering income for the beneficiaries. It is essential for trustees to think about the suitableness of the investment funds in the trust, funding, the type of trust arrangement and the requirements of the beneficiaries.
A varied portfolio of assets should be used to meet the trusts specific targets.
This approach can help to limit the volatility within the trust investment by investing across varied asset categories. It is essential to take into account risk any specific requirements of the trustees. This could also include vesting in an ethical or sociably responsible way.
Trustees have an administrative duty to review the assets held within the trust on a regular basis. This can be a drawn-out and protracted process, specially if the trust administrators are not knowledgeable investors.
Trusts and Independent Financial Advice.
It is fundamental to seek individual and impartial advice on the assets held within any form of trust arrangement. We regularly advise new and existing trustees on acceptable asset allocation investment strategies.
Trustees frequently engage the investor functions of a bank or stock-broker. Sometimes the service is not specific to the demands of the individual trust. A one size fits all approach may not take into consideration the personal needs of the trust. For example, the requirements of a large educational trust might be totally different to a small family trust.
The costs to administrate the investments are an all-important component. The admin fees charged by stockbrokers and banks for trust investment funds management can be expensive. This will impact on the returns the trust can achieve.
Our investment funds process takes into account the charges, as this is a recognized factor when we advocate special investment funds.
If as trustees you are considering investing it is fundamental to remember that the value of the trust investment and the income generated could possibly rise as well as fall. 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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