Since the introduction of The trustee Act 2000, trustees now have special duties concerning the serving and administration of trust funds. The duty of care is applicable to lay and professional trustees. However 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 new or existing trusts, the trustees must take into account the trusts aims 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 take into account the suitableness of the investment funds in the trust, funding, the type of arrangement and the demands of the beneficiaries.
A diversified portfolio of assets should be used to meet the trusts unique objectives.
This type of approach can help to reduce the risks within the trust investment funds by investing across various asset categories. It is critical to take into account risk any specific prerequisites of the trustees. This could also include consider investing in an ethical or sociably responsible way.
Trustees have an administrative obligation to review the assets held within the trust on a regular basis. This can be a drawn-out and protracted process, particularly if the trust decision makers are not veteran investors.
Trusts and Independent Financial Advice.
It is critical to seek individual and impartial advice on the assets held inside any form of trust agreement. We regularly advise existing and new trustees on suitable asset allocation investment strategies.
Trustees often engage the investor services of a bank or stock-broker. Sometimes the service is not unique to the demands of the individual trust. A one size fits all philosophy may not take into account the individual needs of the trust. For Instance, the requirements of a large educational trust will be different to a small family trust.
The costs to administer the investment funds are an important factor. The admin fees charged by banks and stockbrokers for trust investment advice can be expensive. This could impact on the returns the trust can achieve.
Our investing procedure takes into account the fee, as this is a known element when we recommend unique investment funds.
If as trustees you are deliberating about investing it is important 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 vested.
Consilium Asset Management are based in Chipping Sodbury and offer a unique Trustee investment management service.
