IFAs should seize the opportunity to provide investment advice to the trustees of trust funds following the introduction of the Trustee Act 2000 last month, says Scottish Mutual International.
The insurer says the act has generated more investment possibilities for trustees than previously available by lifting restrictions on the types of investments permitted under the old legislation.
The act allows trustees to invest trust money in any type of investment as long as they can demonstrate that financial advice was sought before investments were made.
The Trustee Investment Act 1961 forced funds to be split into two parts, with 25 per cent in narrow-range investments, such as bank deposit accounts, and 75 per cent in wider-range investments, such as shares.
SMI says this was an admin burden, with even the wider-range investments being restrictive as they were often limited to shares and unit trusts and excluded life insurance bonds.
Taxation and trusts specialist Liz Henderson says: “The provisions of the old act were widely criticised as being out of date and too cumbersome to administer. The Trustee Act 2000 opens up new opportunities for IFAs due to the wider range of investments.”