Since the introduction of The trustee Act 2000, trustees now have particular obligations concerning the serving and admin of trust funds. The responsibility applies to professional and lay trustees. However 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 new or existing trusts, the trustees must take into consideration the trusts objectives and the suitability of the investments to be held.
Trustees have a responsibility to protect the value of the trust fund, whilst providing income for the beneficiaries. It is critical for trustees to take into account the suitability of the investment funds in the trust, funding, 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 aims.
This approach can help to reduce the volatility within the trust investment by putting across various asset categories. It is fundamental to take into account risk any special requirements of the trustees. This could also include placing investments in an ethical or sociably responsible manner.
Trustees have an administrative obligation to re-examine the assets contained within the trust on a regular basis. This can be a drawn-out and protracted process, especially if the trust decision makers are not knowledgeable investors.
Trusts and Financial Advice
It is important to seek independent and unprejudiced advice on the assets held inside any form of trust agreement. We regularly advise existing and new trustees on acceptable asset allocation investment strategies.
Trustees often engage the investor services of a bank or stockbroker. Occasionally the service is not unique 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 requirements of a large educational trust could be different to a small family trust.
The costs to administrate the investments are an all-important element. The admin charges charged by stockbrokers and banks for trust investment advice can be expensive. This will impact on the returns the trust can attain.
Our investing procedure takes into account the charges, as this is a well-known component when we recommend unique investment funds.
If as trustees you are thinking about investing it is important to remember that the value of the trust investment 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 Sodburychipping Sodbury and offer a unique Trustee investment management service for individual and corporate trusts.
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