Corporate financial advisers, Ward Goodman

Trust Review Service

The Trustee Act 2000 obliges Trustees to ensure Trust assets are invested appropriately, tax efficiently and regularly reviewed. As the Trustee, it is your regulatory responsibility to seek professional advice and create an Investment Policy Statement aligned to the Trust objectives. This is a mandatory requirement, especially if you are appointing an external investment manager. Non-compliance could result in a negligence claim.   

Investing Trust Assets

When a Trustee is considering the best way to invest Trust assets, it is not simply a matter of minimising risk. For instance, an overweight cash position might be perceived as ‘safe’ from capital loss, however this does not entirely satisfy the Act’s requirements, given spending power will be eroded by inflation over the longer-term.

As a Trustee you need to be clear why you do (or do not) have exposure to each asset class: UK equities, overseas equities, cash, corporate bonds (investment grade and high yield), property (commercial and residential), and alternatives. Our Trust Review Service involves assessing the objectives of the Trust and creating an Investment Policy Statement considering all of these asset classes.

There may also be a need/requirement to generate income for one of the beneficiaries so the choice of asset class and make-up of the portfolio will need to reflect this. 

A further consideration when making investment decisions is the immediate and on-going taxation implications.  As we work closely with our internal taxation and trusts department, we can draw on their expertise and ensure you are put in an informed position before making any decisions.   

Trust Review Service   

Our Trust Review Service is available for both individuals as well as professional trustees.  For the professional trustee, we will help enhance your proposition to Trustee clients and ensure compliance with the Trustee Act. It could include a systematic review of all Trusts within your practice.

For all trust cases our review service will cover the following:

  • Initial Review – a ‘suitability’ report analysing the Trust assets in relation to the Trustee Act. We also recommend corrective action to address any weakness within the portfolio.
  • Investment Policy Statement – creation of bespoke Investment Policy Statement for the Trust.
  • Annual Review – short-form ‘suitability’ report highlighting any changes in legislation and the investment world, with an update on the progress of the portfolio.

Suitability Report

Each suitability report contains the following information:

  • Overview of the Trustee Act and broader considerations
  • Note on current tax legislation for Trusts
  • Trust Investment Policy Statement
  • Suitability of the investments to meet the Trust objectives
  • Suitability of the Trust assets in relation to the current investment climate
  • Diversification strategy
  • Taxation position of current assets
  • Review of performance against benchmark
  • Strategy for formal Trust reviews
  • Summary of current position

For more information about our Trust Review Service or to find out how we can help you to create a clear strategy for dealing with the implications of the Trustee Act, please contact us on 01202 875900.

MEET OUR FINANCIAL SERVICES EXPERTS

Matthew Isaacs Financial Adviser at Bournemouth Financial Advisers, Ward Goodman Financial Advice Service

Matthew Isaacs

Financial Planner

Financial Services

Direct Dial: 07703 830 533

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Garteth Simon, Director, Bournemouth Accountants and Financial Advisers, Ward Goodman Chartered Accountants

Gareth Simon

Director

Financial Services

Direct Dial: 07918 745 133

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