Mark Morford Product Manager, Private Clients and

Transcript:Mark Morford Product Manager, Private Clients and:
Mark Morford Product Manager, Private Clients and Investments Mark Hodkinson Client Relations Manager (Charities) CAF Financial Solutions Ltd November 2013 Feel confident in your investment decisions A robust approach to constructing an investment policy Agenda What is an investment policy? What can trustees invest in? Who is the investment policy for? Who needs an investment policy? Where do we start? What is required of trustees? What is included in the investment policy? Determining objectives What risks should you consider when making investments? Liquidity requirements and time horizon Ethical considerations The effect of restrictions Summary Useful links/resources What is an investment policy? Clear direction for the trustees about exactly what the charity is trying to achieve Different for each charity, depending on aims, operating model, timescales and resources Sets out in writing the investment objectives are and how it intends to achieve them What can trustees invest in? Interest bearing cash deposits in bank or building society accounts Shares in a listed company (listed equities) Interest bearing loans to a company or the government (bonds or gilts) Common investment funds and other collective investment schemes Non traded equity in private companies Commodities Derivatives Who is the investment policy for? Trustees/employees Investment advisers/managers Beneficiaries/donors Charity Commission Who needs an investment policy? Everyone! Foundation/grant-maker Operational charity Endowed charity (or an endowment within a charity) Cash-only investors Where do we start? The Charity Commission guidance – CC14 Sits alongside other guidelines: Charity Reporting and Accounting - CC15b Internal Financial Controls - CC8 Provides support for trustees Does not seek to restrict the remit of trustees to invest Demonstrates how much freedom trustees have What is required of trustees? Obtain the best financial return Within the level of risk considered to be acceptable Generate return to be spent on the charity’s aims In order to act within the law trustees must: Know, and act within, their charity’s power to invest Exercise care and skill Select the right investments Take advice Review investments Explain their policy in the trustees annual report What is included in the investment policy? Scope Objectives Attitude to risk Amount available Timing of returns Liquidity needs Types of investments Decision makers Key performance indicators Reporting requirements Responsibility and remit of the investment manager Investment manager’s principles Determining objectives Amount of permanent endowments/designated or restricted funds Total amount Specific or general liquidity needs Need for income and growth/income or growth/retain capital value? Governing