Investment - Articles - Charity sector must seek independent investment advice


Charity Commission guidance now expects all charity trustees to ‘take professional advice before making and reviewing investments’. Investment managers join Broadstone’s call for greater uptake of high-quality independent investment advice in the sector.

 Broadstone has published a guidance note calling for greater up-take of high-quality, independent investment advice in the charity and third sector.

 The note from the leading independent pensions, employee benefits, investments and insurance consultancy arrives at a time when the world of investments is increasingly difficult and often daunting to navigate.

 Investible assets can be powerful to help fund and support a charitable cause, but knowing what to invest in, who to invest with, and how to invest can be challenging.

 The Charity Commission published its CC14 guidance last August for investing charity money which now states that all charity trustees should ‘take professional advice before making and reviewing investments’.

 In addition, investment managers should be reviewed regularly and ‘independently of the manager’.

 From an investment standpoint, the role of a long-term investment consultant can help avoid excessive fees, unnecessary manager reviews and pinpointing the components of the investment strategy that need attention.

 For the first time, a range of investment managers have joined Broadstone’s call for action to help provide trustees with greater insight and understanding on their strategy including: investing their capital for the first time, investment policy and conducting investment reviews and monitoring.

 Rachel Titchen, Charities and Investment Director at Broadstone commented: “The role of independent investment consultants isn’t as well established across the not-for-profit sector like it is within other sectors.

 “Instead, we often we see charities adopting a long-lasting relationship with one or two investment managers. While these managers have been servicing the needs of charities well for many years, any advice or information they provide on investment strategy could inherently pose a conflict of interest.”

 “The Charity Commission published its CC14 guidance to ensure investment managers are reviewed regularly and independently of the manager. Increasing trustees’ engagement with their investment strategy and taking independent advice is necessary to meet this expectation.

 “All organisations working in the third sector should be doing their utmost to help charities succeed in their cause, and we are delighted to have the support of investment managers in this matter.”

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