Since the introduction of the trustee Act 2000, trustees now have unique responsibilities concerning the serving and admin of trust funds. The duty of care is applicable to professional and lay trustees. Still higher standards are expected from professional trustees.
A legal duty of care applies to the trustee investments that are contained within the trust. For existing and new trusts, the trustees must take into account the trusts objectives and the suitableness of the investment funds to be held.
Trustees have an obligation to protect the 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, and the type of trust arrangement and the requirements of the beneficiaries.
A wide-ranging portfolio of assets should be used to meet the trusts particular objectives.
This type of approach can help to reduce the volatility within the trust investment by putting across different asset categories. It is important to take into account risk any particular demands of the trustees. This could also include consider investing in an ethical or sociably responsible style.
Trustees have an administrative obligation to re-examine the assets held within the trust on a regular basis. This can be a drawn-out and protracted process, particularly if the trust executives are not knowledgeable investors.
Trusts and Independent Financial Advice.
It is essential to seek independent 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 particular to the demands of the individual trust. A one size fits all approach may not take into consideration the personal needs of the trust. E.g., the requirements of a large educational trust should be different to a small family trust.
The costs to administer the investment funds are an all-important factor. The admin fees charged by stockbrokers and banks for trust investment advice can be high. This could have an affect on the investment returns the trust can accomplish.
Our investing process takes into account the fee, as this is a recognized element when we recommend special investments.
If as trustees you are deliberating about investing it is critical to remember that the value of the trust investment funds and the income given might rise as well as fall. There is no guarantee you will get back more than you invested.
Consilium Asset Management are based in Chipping Sodbury and offer a unique Trustee investment management service.
Share and Enjoy:
These icons link to social bookmarking sites where readers can share and discover new web pages.