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Trust Funds - Financial Adviser won't release funds
littlebranshill
Posts: 33 Forumite
I am one of 3 trustees who are looking after the monies left in a lifetime trust for an educationally subnormal relative. The bulk of the monies are invested by an Independent Financial Adviser. After about 3/4 years the 3 trustees have now agreed to release some money from the trust fund so that one of the trustees can have improvements to her house making room for the educationally subnormal relative to live there at a future date when her illness worsens. We have all signed a letter instructing the Financial Adviser to starting withdrawing these funds to be placed in a bank account held by the 3 of us. He wants to know why we want this money, he wants to see planning permissions etc. We have told him our main aim but he has come back time and time again with more requirements. He wants us to provide a solicitors letter agreeing to what we are doing. We have contacted our solicitor who more or less said it was non of the Financial Adviser's business what we want this money for and he must do as we wish. When I went back to him and told him this and could he please start withdrawing funds he came back to say that he is referring the matter to his "Compliance Department" and will get back to me. This has now been going on for about a month. This chap is my neighbour and I did think he was a very trustworthy guy but now I am wondering. Can he refuse to withdraw funds? Surely not? Your thoughts please.:mad:
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Perhaps your initial thought that he was trustworthy is proving correct? Why not show him the conversion plans and permission granted, do these exist as yet or are they just plans for the future? if so then perhaps he is right to be cautious as he is acting not for you but for the owner of the money. It's strange that your solicitor didn't write the letter, why would he not? Sorry if I sound harsh, I am not meaning to be.
On the other hand..... perhaps there's no money.0 -
littlebranshill wrote: »After about 3/4 years the 3 trustees have now agreed to release some money from the trust fund so that one of the trustees can have improvements to her house making room for the educationally subnormal relative to live there at a future date when her illness worsens.
If I was the financial advisor, I wouldn't be happy about this.
One of the trustees is going to have money spent on her house in case, at some unknown stage in the future, the relative needs to move in?0 -
If I was the financial advisor, I wouldn't be happy about this.
One of the trustees is going to have money spent on her house in case, at some unknown stage in the future, the relative needs to move in?
Fair comment but all three of the trustees are in agreement about this so surely there should not be a problem. Is he within his legal rights to stop us withdrawing this money? What has it got to do with him? Surely he just acts for us and what we do with the money is nothing to do with him?0 -
Who or what is the client of the Independent Financial Adviser?
Who or what pays his fees?0 -
Look at the Trust Deed to see what powers have been given to the Trustees.
For Trustees' powers and duties see http://www.sghmartineau.com/publication_event/updates/Guide-to-Trusts-and-Trustees-%20Duties-and-Powers.PDF0 -
littlebranshill wrote: »Fair comment but all three of the trustees are in agreement about this so surely there should not be a problem. Is he within his legal rights to stop us withdrawing this money? What has it got to do with him? Surely he just acts for us and what we do with the money is nothing to do with him?
If he thinks the trustees are starting to use the money for their own benefit, he may be obliged to refer the matter on.0 -
An IFA has no say on a trust unless they are a trustee. If they were a trustee, they have a legal responsibility to act a certain way and the questions fit with that. However, if not a trustee, there is the possibility that the IFA considers something dodgy may be going on. In which case, there is also the responsibility to verify funds are being used in accordance with trust instructions. Whilst the IFA cant ultimately stop you doing what you want, they can get information and make a financial crime report and inform the investment company of their concerns and that it has been referred and they could hold it up. If a financial crime report has been made, the instructions cannot be carried out until he has been given the all clear to do so.When I went back to him and told him this and could he please start withdrawing funds he came back to say that he is referring the matter to his "Compliance Department" and will get back to me.
This does seem to suggest a referral under financial crime rules.We have contacted our solicitor who more or less said it was non of the Financial Adviser's business what we want this money for and he must do as we wish.
Bit strange for a solicitor to say that as they should know the adviser has a legal requirement to check on withdrawals and report them if they feel there is something suspicious. Although if the solicitor has no knowledge of financial services regulation and hasnt looked it up, then they are probably just taking a guess.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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littlebranshill wrote: »Your thoughts please.:mad:
Why is this obstinate IFA in the loop? What annual fees are they trousering for their services and what are you getting in return?
It might be worth considering taking more direct control of the money, cutting annual costs, and kicking that IFA into touch.
After that, the trustees can use these funds for their intended purpose.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Look at the Trust Deed to see what powers have been given to the Trustees.
The Trustees have the power in their absolute discretion to apply the whole or any part of the income of the Trust Fund for the advancement, preferment, benefit comfort or general welfare of the said ***** and the Trustees shall have power to expend all the income and capital of the Trust Fund for such purpose if within their absolute discretion that course is desirable or unavoidable to ensure that ***** shall be provided with any and every comfort and assistance for her well being0
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