Published October 28, 2015
If you’re going to stick your neck out and be a trustee, you need to eliminate unnecessary trustee risks.
Last week I presented a webinar on reducing trustee risks through good trust practice. The audience was made up of trustees, trust administrators and advisers to trustees.
In the webinar I highlighted five key challenges I’m seeing for professional trustees. Of the five, the priority for the attendees was lowering trustee risks (52%) followed by improving commercial value (19%).
When it comes to trustee risks, I see trustees taking two types of risks – good risk and bad risk.
In my mind, ‘good risk’ is just part of the price of entry into the game. You accept there will always be some sort of risk inherent in anything you do. The trick is to recognise that potential risk and put plans in place to mitigate it.
It’s bit like investing. You have to be in the market to get the returns of the market. One way you mitigate investment risk is by diversifying the type of investments you make.
For professional trustees, good risk is balanced off the potential rewards (for example, the commercial value received as a professional trustee). One strategy for diversifying trustee risks is through good practice.
However, the bad risk I’m seeing for many professional trustees is related to their conduct.
This risk generally arises by not thinking about, or doing the job that’s been signed up for. The way I see it, this bad risk is unnecessary risk.
Here are five areas of focus for good practice that I know work and will help trustees reduce risk:
When it comes to lowering trustee risks, good practice works!
What’s your standard of practice?
Define what you stand for and know what ‘good’ looks like for you.
Get your Free 127 page Trustee Guide!
21 trust experts share their best strategies to help trustees plan and manage their trusts.
PLUS: We’ll keep in touch with tips & insights on good trustee practice.
© Trustee Support Ltd 2017. All rights reserved.