Trustees’ Investment Duties
The Trustee Act 2000 is clear as to the investment responsibilities of Trustees.
Section 1 states that
‘…a trustee… must exercise such care and skill as is reasonable in the circumstances.’
Then in section 4
‘(2) A trustee must from time to time review the investments of the trust and consider whether, having regard to the standard investment criteria, they should be varied.
(3) The standard investment criteria, in relation to a trust, are –
(a) the suitability to the trust of investments…, and
(b) the need for diversification of investments of the trust…’
Section 5 considers advice.
‘(1) Before exercising any power of investment… a trustee must… obtain and consider proper advice about the way in which… the power should be exercised.
(2) When reviewing the investments of the trust, a trustee must… obtain and consider proper advice about whether… the investments should be varied.’ (There is a limited exception).
The ramifications of not taking advice are serious, with liability falling on the Trustees shoulders.
We work with Trustees to develop long term investment policies and help them with their duty to review portfolios.
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