Investment Advice for Trustees
Since the introduction of The trustee Act 2000, trustees now have particular duties concerning the serving and admin of trust funds. The duty of care applies to lay and professional trustees. Even So 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 objectives and the suitableness of the investment funds to be held.
Trustees have a duty to protect the asset value of the trust fund, whilst providing income for the beneficiaries. It is crucial for trustees to think about the suitability of the investments held, funding, the type of trust in place and the requirements of the beneficiaries.
A diversified portfolio of assets should be used to meet the trusts unique objectives.
This type of approach can help to limit the volatility within the trust investment by placing across several asset categories. It is essential to take into account risk any special prerequisites of the trustees. This could also include investing in an ethical or sociably responsible style.
Trustees have an administrative duty to review the assets held within the trust on a regular basis. This can be an endless and lengthy process, especially if the trust executives are not experienced investors.
Trusts and Independent Financial Advice.
It is important to seek individual and impartial advice on the assets held within any form of trust agreement. We regularly advise existing and new trustees on acceptable 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 one size fits all approach may not take into account the personal needs of the trust. For example, the prerequisites of a large educational trust will be totally different to a small family trust.
The costs to administer the investment funds are an all-important component. The admin fees charged by banks and stockbrokers for trust investment funds advice can be expensive. This might impact on the returns the trust can attain.
Our investing procedure takes into account the fee, as this is a recognized component when we recommend specific investment funds.
If as trustees you are considering vesting it is fundamental to remember that the value of the trust investment funds and the income generated might rise as well as fall. There is no guarantee you will get back more than you vested.
Consilium Asset Management are based in Chipping Sodbury and offer a unique Trustee investment management service.