Investing via Bare Trust for 3 young relatives - best platform?

cloud_dog

If you don't want to make use of a S&S JISA, then that is fine but, all of the considerations you have listed are equally applicable to a S&S JISA account or a bare trust account.  If the parents are not in to investing then they simply provide you with the login details for the JISA account and you work exactly how you would have done in a bare trust S&S account.  There is no way for you to remove the money (so that is not a concern), you have been given authorised access to the account by the responsible people (parent), and, and money in the account came from you.

Just looking in from the outside, given your situation I can't see a downside in this instance.

EDIT: Just meant to add, I respect your reasons for wanting things done a certain way but thought this may be of some help.

dunroving

cloud_dog said:

If you don't want to make use of a S&S JISA, then that is fine but, all of the considerations you have listed are equally applicable to a S&S JISA account or a bare trust account.  If the parents are not in to investing then they simply provide you with the login details for the JISA account and you work exactly how you would have done in a bare trust S&S account.  There is no way for you to remove the money (so that is not a concern), you have been given authorised access to the account by the responsible people (parent), and, and money in the came from you.

Just looking in from the outside, given your situation I can't see a downside in this instance.

I can certainly see your point from an investment point of view, but let's just say, "Families are complicated". I'd rather be the primary trustee of the account, so there is no doubt about the paper trail leading back to me. If I give a gift to somebody, it's important to me that they understand who it came from (even if I'm not around at the time  )

Malthusian

The OP doesn't say he wants to retain control of the money, simply that he wants to control the investment choices.

Potayto po...tayto. When it comes to someone else's money in bare trust, control of the investments is pretty much all there is to control. In a JISA the parent or guardian controls everything there is to control. The donor has no say.

I'm sure that can be achieved by the OP stipulating the investments to use.

That's not control, that's a polite request to the person who has control. None of this matters for as long as the donor and the trustee are in agreement, of course, but if they're ever in disagreement only one of them will be in control.

dunroving said:

Just as a side note, the reason I wish to keep control of (manage) the investments is that their parents are not knowledgeable about investing (for example, they have "invested" money in the children's cash JISAs that are not earning much at all), plus I don't want to burden the parents with the responsibility for managing the accounts. But having one parent as a co-exec means I can at least communicate with them about the investments as the children grow older. 

Co-trustee, just to be pedantic (an executor plays a very different role). I agree it is a very good idea, as they would be able to see the benefits of stocks and shares investment over the long term as the money from you outpaced the cash JISAs, and when the time came for them to be sole trustees, hopefully they would be sold on the benefits of long-term investment.

dunroving

Malthusian said:

The OP doesn't say he wants to retain control of the money, simply that he wants to control the investment choices.

Potayto po...tayto. When it comes to someone else's money in bare trust, control of the investments is pretty much all there is to control. In a JISA the parent or guardian controls everything there is to control. The donor has no say.

I'm sure that can be achieved by the OP stipulating the investments to use.

That's not control, that's a polite request to the person who has control. None of this matters for as long as the donor and the person in control are in agreement, of course, but if they're ever in disagreement only one of them will be in control.

dunroving said:

Just as a side note, the reason I wish to keep control of (manage) the investments is that their parents are not knowledgeable about investing (for example, they have "invested" money in the children's cash JISAs that are not earning much at all), plus I don't want to burden the parents with the responsibility for managing the accounts. But having one parent as a co-exec means I can at least communicate with them about the investments as the children grow older. 

Co-trustee, just to be pedantic (an executor plays a very different role). I agree it is a very good idea, as they would be able to see the benefits of stocks and shares investment over the long term, and when the time came for them to be sole trustees, hopefully they would be sold on the benefits of long-term investment.

Your first two points hit the nail squarely on the head.

Re: Your latter point, Thanks for the correction - I knew when I wrote co-exec that it was wrong, but my brain wouldn't kick in (I just got off the bike trainer and am knackered!).

Also, in connection to your point ("hopefully they would be sold on the benefits of long-term investment"), I have had a chat with one set of parents last week, about cash "savings" vs "investments" over an 18-year period, and gave them an excellent, very basic ST article from Iain Cowie explaining it. I am hoping they might also at some point decide to change the JISA to a S&S JISA. But as you so clearly point out above, I can't make them change it (and wouldn't want to try), because they are in control of it, and rightfully so. My fear would be that I open a S&S account, and they move it all back into cash, because of misunderstanding a "panic!" "crash!" newspaper headline. I need to be in formal control of the investments for my own peace of mind.

xylophone

they have "invested" money in the children's cash JISAs that are not earning much at all),

Suggest a transfer?

https://www.moneysavingexpert.com/savings/junior-isa/

If the full £9000 is not being contributed each year to the cash JISA, what about using the stocks and shares JISA as well?

dunroving

xylophone said:

they have "invested" money in the children's cash JISAs that are not earning much at all),

Suggest a transfer?

https://www.moneysavingexpert.com/savings/junior-isa/

If the full £9000 is not being contributed each year to the cash JISA, what about using the stocks and shares JISA as well?

I will, eventually. It's a long road convincing people who literally have almost zero knowledge if personal finance.

xylophone

It's a long road convincing people who literally have almost zero knowledge if personal finance.

Yes - other posters have made the same comment.

Herbalus

I have nothing productive to add because I find trusts complicated, but I just wanted to say I have a lot of respect for people who are trying to do the right thing, even when it is much more complicated. Well done for sticking to your morals and objectives.