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Money held in a Discretionary Trust - what are good ways of investing these assets?
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MacGee
Posts: 2 Newbie
I am 1 of 3 trustees of a discretionary trust which holds only cash. After great difficulty we eventually managed to get a current account, and now are trying to take our legal duties as trustees seriously and make good investments. However most banks and building societies do not accept investment from a discretionary trust except for accounts which pay a poor rate of interest. We have only been successful in opening one fixed rate bond. We are looking for 2 other investments with a low level of risk, and suitable to be held for the short to medium term eg 1 to 3 years. I am not keen on Investment Bonds as these appear only to be suitable for long-term investment, having high initial charges and penalties for early withdrawal, I believe. Any suggestions?
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Some organisations that allow trustee accounts are mentioned in this thread
http://forums.moneysavingexpert.com/showthread.html?t=7591670 -
I have looked at the thread now. Have already had to discount the Leeds, as they accept some kinds of trusts but not a discretionary trust of our type. I will check out the others. Thanks.martinman3 wrote: »Some organisations that allow trustee accounts are mentioned in this thread
http://forums.moneysavingexpert.com/showthread.html?t=7591670 -
Any update on this please .0
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However most banks and building societies do not accept investment from a discretionary trust except for accounts which pay a poor rate of interest.
You seem to be talking about savings accounts and not investments.I am not keen on Investment Bonds as these appear only to be suitable for long-term investment, having high initial charges and penalties for early withdrawal, I believe. Any suggestions?
Apart from the fact that the majority have no initial charges. The early withdrawal penalties tend to only exist on the ones that pay an initial higher allocation. If you dont want a early withdrawal penalty then dont go with one that has it. There are plenty that dont. Although usually its worth it due to the size of the initial allocation.
The time-scale is relevant when investing. However, so is the responsibility of the trustees to make suitable investment choices. If its a trust that inst going to kick in for the long term then using only cash based savings could very well be considered inappropriate and leave the trustees open to a claim of mismanagement.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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