Trustee Investments
Since the introduction of The trustee Act 2000, trustees now have specific responsibilities relating to the servicing and admin of trust funds. The duty of care applies to professional and lay trustees. Even So higher standards are expected from professional trustees.
A statutory duty of care applies to the trustee investments that are held. For new or existing trusts, the trustees must take into consideration the trusts aims and the suitableness of the investment funds to be held.
Trustees have a duty to protect the value of the trust fund, whilst offering income for the beneficiaries. It is important for trustees to think about the suitableness of the investments held, funding, the type of arrangement and the demands of the beneficiaries.
A diversified portfolio of assets should be used to meet the trusts unique aims.
This approach can help to reduce the volatility within the trust investment funds by vesting across several asset classes. It is important to take into account risk any specific prerequisites of the trustees. This could also include investing in an ethical or sociably responsible way.
Trustees have an administrative duty to re-examine the assets contained within the trust on a regular basis. This can be a time-consuming and lengthy process, especially if the trust administrators are not practiced investors.
Trusts and Independent Financial Advice.
It is essential to seek individual and unprejudiced advice on the assets held within any form of trust agreement. We continually advise new and existing trustees on acceptable asset allocation investment strategies.
Trustees frequently engage the investor functions of a bank or stockbroker. Sometimes the service is not specific to the demands of the individual trust. A 1 size fits all approach may not take into consideration the individual needs of the trust. E.g., the demands of a large educational trust should be different to a small family trust.
The costs to administer the investments are an important element. The admin charges charged by stockbrokers and banks for trust investment management can be expensive. This will have an affect on the investment returns the trust can attain.
Our investment procedure takes into account the costs, as this is a known element when we recommend particular investments.
If as trustees you are thinking about investing it is important to remember that the value of the trust investment and the income generated might fall as well as rise. 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.