Since the introduction of The trustee Act 2000, trustees now have particular responsibilities concerning the serving and administration of trust funds. The responsibility applies to lay and professional trustees. Still higher standards are expected from professional trustees.
A statutory duty of care is applicable 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 offering income for the beneficiaries. It is fundamental for trustees to take into account the suitableness of the investments held, funding, the type of arrangement and the requirements of the beneficiaries.
A wide-ranging portfolio of assets should be used to meet the trusts unique objectives.
This type of approach can help to limit the risks within the trust investment funds by putting across various asset categories. It is fundamental to take into account risk any unique demands of the trustees. This could also include vesting in an ethical or sociably responsible style.
Trustees have an administrative responsibility to review the assets held within the trust on a regular basis. This can be a prolonged and lengthy process, specially if the trust decision makers are not veteran investors.
Trusts and Financial Advice
It is important to seek unbiased and impartial advice on the assets held within any form of trust arrangement. We continually advise existing and new trustees on suitable asset allocation investment strategies.
Trustees frequently engage the investor functions of a bank or stockbroker. Sometimes the service is not specific to the needs of the individual trust. A 1 size fits all approach may not take into consideration the specific needs of the trust. For Instance, the demands of a large educational trust should be totally different to a small family trust.
The costs to administrate the investment funds are an all-important factor. The admin costs charged by banks and stockbrokers for trust investment funds management can be expensive. This could have an affect on the returns the trust can accomplish.
Our investment funds process takes into account the fee, as this is a recognized factor when we recommend particular investment funds.
If as trustees you are deliberating about investing it is important to remember that the value of the trust investment and the income generated could possibly 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.
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