Investment Advice for Trustees of Private Trusts

In most situations the object of any investment strategy is to end up with as much money as possible at the end of the day after the tax has been paid. It does not actually matter whether that is achieved with investment income or capital gains. With trusts there is frequently a life tenant entitled to income and a remaindermen entitled to capital gains and so the distinction does matter. Also one normally has some idea when "the end of the day" will be whereas for many trusts the "end of the day" is when the life tenant dies and that is, in its very nature, uncertain although, actuarially, some estimate is possible.

Trustees therefore have to deal with the additional requirement of balancing the conflicting interests of life tenants and their remaindermen and therefore need investment advisors to be aware of these requirements so that they can frame their advice accordingly.

This is not a problem with the largest of trusts because the administrative costs are small relative to the size of the fund but for any trust that is smaller than that costs are an issue.

We therefore offer a portfolio review service that trustees can use annually or less frequently to revue their investment strategy and how their current portfolio balances the interests of the various beneficiaries. This enables trustees to adopt a more static investment policy, thereby avoiding fund management charges arising both directly and through unecessary churning of the portfolio.