Trustee Investment
Since the introduction of The trustee Act 2000, trustees now have specific responsibilities 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 is applicable 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 a responsibility to protect the asset value of the trust fund, whilst offering income for the beneficiaries. It is fundamental for trustees to take into account the suitableness of the investment funds held, funding, the type of trust in place and the demands of the beneficiaries.
A varied portfolio of assets should be used to meet the trusts unique objectives.
This approach can help to limit the volatility within the trust investment funds by investing across different asset categories. It is important 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 responsibility to re-examine the assets held within the trust on a regular basis. This can be a drawn-out and protracted process, especially if the trust decision makers are not experienced investors.
Trusts and Independent Financial Advice.
It is fundamental to seek independent and impartial advice on the assets held within 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 stock-broker. Occasionally the service is not unique to the demands of the individual trust. A 1 size fits all approach may not take into consideration the specific needs of the trust. E.g., the prerequisites of a large educational trust might be different to a small family trust.
The costs to administer the investments are an important element. The admin fees charged by banks and stockbrokers for trust investment management can be high. This could have an affect on the investment returns the trust can accomplish.
Our investment funds procedure takes into account the fee, as this is a known component when we recommend unique investments.
If as trustees you are deliberating about investing it is essential 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.