Trustee Investments
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Since the introduction of The trustee Act 2000, trustees now have particular responsibilities concerning the services and administration of trust funds. The duty of care applies to professional and lay trustees. Even So higher standards are expected from professional trustees.
A legal 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 account the trusts aims and the suitability of the investments to be held.
Trustees have an obligation to protect the value of the trust fund, whilst providing income for the beneficiaries. It is crucial for trustees to take into account the suitability of the investment funds in the trust, funding, the type of trust arrangement and the demands of the beneficiaries.
A varied portfolio of assets should be used to meet the trusts specific aims.
This approach can help to reduce the volatility within the trust investment by putting across several asset classes. It is fundamental to take into account risk any unique demands of the trustees. This could also include placing investments in an ethical or sociably responsible manner.
Trustees have an administrative duty to re-examine the assets held within the trust on a regular basis. This can be a time-consuming and protracted process, specially if the trust decision makers are not knowledgeable investors.
Trusts and Financial Advice
It is important to seek individual and impartial advice on the assets held within any form of trust arrangement. We continually advise existing and new trustees on acceptable asset allocation investment strategies.
Trustees often engage the investor services of a bank or stock-broker. Sometimes the service is not specific to the needs of the individual trust. A 1 size fits all philosophy may not take into account the individual needs of the trust. For Instance, the prerequisites of a large educational trust should be totally different to a small family trust.
The costs to administer the investments are an all-important factor. The admin fees charged by banks and stockbrokers for trust investment funds management can be expensive. This can have an affect on the investment returns the trust can accomplish.
Our investing process takes into account the charges, as this is a recognized factor when we recommend particular investments.
If as trustees you are deliberating about investing it is critical to remember that the value of the trust investment and the income given 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.
