Hi Folks!! I can't understand a small point..this is in chapter 27: Meeting invester needs - institutions, Core Reading example where it asks to Outline key issues to be considered when forming a long term investment strategy for a charitable trust: 2nd bullet point says: the duties, authorities and responsibilities of the trustees and other parties in the process my Q is: Why do you need to consider the roles of these people when forming your investment strategy? Surely trustees are going to be there all times..so you don't need to understand their responsibility in forming your investment strategy? Cheers Jon
i think you do. to see this consider the example by analogy to a pension scheme trustee setting the investment strategy. what is their responsibility? to members or to the company or both? This is key in deciding what their investment objective is - i.e. to maximise return subject to a certain degree of risk - but what level of risk...this depends on their responsibilities...i.e. to the member they wish to minimise risk, but also have responsibility to the company in making the scheme affordable in the long term. i think this maps onto the charitable trust in a similar way.
