Top Tip – Ever heard of a Blind Trust?
Written by Jane Alford
We’ve been busy here putting together the training material for J10 the new CII Discretionary Investment Management exam and whilst reading the CII manual, I came across the term ‘blind trust’.
I’ve been in this industry for more years than I’d like to admit, and I had never heard of a blind trust before. Secret trusts often got a mention in J02 or the old G10, but blind? Not as far as I was aware.
The CII manual describes it as a type of bare trust where clients such as politicians and business people need to avoid the appearance of a conflict of interest as they have no say (or apparent idea) what the investments are.
How interesting. I got straight onto the World Wide Web and it turns out at the last count sixteen of our UK ministers had blind trusts in place. Not a huge number I guess. And then I find Barack Obama, George Bush and Bill Clinton has had at least one blind trust at some point.
It seems they work and make sense but the biggest problem seems to be the cost of setting one up (seems you might need to be really rich to find one useful!) and actually ensuring it is as blind as it’s claiming. Quoting from an article written last year on CNN News ‘often a wealthy person’s blind trust might be described at best as slightly myopic’.
Which I expect could have the type of repercussions trying to be avoided by the set up in the first place.
So what do you think? Has anyone got any experience of blind trusts? For further material on J10 follow the link: