Charitable Investments

The Trustee Act 2000 imposes various legal obligations on trustees particularly when it comes to investing trust money. You are required, amongst other things, to ensure that Trust investments are suitable, appropriately diversified and reviewed regularly. There is also an obligation to take investment advice.

You can, as a charity, buy in a tax efficient CIS (Collective Investment Scheme), which is a charitable investment that is charitable – or we can build you a portfolio that similarly achieves great returns without paying a penny of tax – so all the profit goes towards the charitable purpose.

Simply by consulting us on an occasional basis you can satisfy these criteria. There are a few parts of the Act 2000, which we can help satisfy.

Part II Section 4.3

This regards the ‘standard investment criteria’ of the trust. This means that:

  1. You need a standard set of criteria
  2. It needs to consider all possible appropriate investments
  3. The need for diversification

These criteria are very familiar to independent financial advisers and as legal practitioners too we are well versed with creating and, often more importantly, maintaining these investment criteria so you, as trustees, can manage your assets free from the hassle of investment management.

Part II Section 5.4

It is a legal duty of trustees to seek proper advice when discussing the standard investment criteria and any capital that falls within it.

The definition of proper advice within the act being:

“Proper advice is the advice of a person who is reasonably believed by the trustee to be qualified to give it by his ability in and practical experience of financial and other matters relating to the proposed investment.”

Who better to fulfil this function than an SPS awarded, qualified and experienced adviser dual regulated by both The Financial Conduct Authority AND The Solicitors Regulation Authority.

If you decide that you do want an adviser there is one other function an IFA can fill which can aid in the smooth running of the trust/charity and that is, from Part IV. Section 11. as an agent.

Not only can we process orders on your request, but also we can act on behalf of the entire trustee board.

Normally, when a trustee board makes a decision to act, there are between two hours to three weeks of filling in forms in the appropriate places and ensuring all the correct signatories are in place.

With a professional IFA, this does not occur as we come with all the relevant paperwork and the ability to process small instructions on your behalf.