Ever heard of a Blind Trust?

Blind trusts only appear to be mentioned in J10 –  the CII exam on Discretionary Investment Management. Here, we explain what a blind trust is and why a person might wish to have one set up.

The J10 manual describes them as a type of bare trust used by clients such as politicians and business people who need to avoid the appearance of a conflict of interest as they have no say on the management or apparent idea of what the investments held in the trust are.

How interesting.  We got straight onto Google and according to one source, several UK ministers have had blind trusts put in place.  Further internet reports state that three former US presidents had at least one blind trust in place at some point, and the current US president’s business holdings were placed into a type of trust with his eldest children in charge, whilst he concentrates on his main job.

It seems they do 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 a couple of years ago ‘often a wealthy person’s blind trust might be described at best as slightly myopic’.

Which we suspect could have the type of repercussions trying to be avoided by the setup in the first place!

So for those of you studying J10 – which potentially means it could come up in AF4 as well – just be aware of this rather unusual type of trust.

Grab the resources you need!

If you’re studying for your CII J10 exam, and you’re wanting to answer the questions confidently on exam day, grab our free taster to try out one of Brand Financial Training’s resources for yourself.  Click the link to download the J10 mock paper taster now!