What is a corporate trustee?
A corporate trustee is an independent supervisor of...
- managed funds - such as KiwiSaver schemes, superannuation schemes and unit trusts
- retirement villages
- debt securities
- custodial services
- securitisation of assets.
What does a corporate trustee do?
A corporate trustee's role is to act in the interests of investors by being an independent supervisor of the security and a custodian of assets. The prime responsibility is that of a prudential supervisor, and not a hands-on manager.
Issuers of securities to members of the public are bound by a trust deed and require a trustee by law. The trust deed sets out the 'rules' for the investment. The trustee's role includes to...
- represent the collective interests of investors
- ensure the company offering the investment complies with the trust deed
- hold assets in trust separate from the scheme manager (in some cases).
Choosing a trustee
Choosing the right trustee is a key decision and can make the difference between things running smoothly, and not.
If a trustee is not required by law, there are many good reasons to appoint one anyway. A good trustee can add value and may save you time and money.
When you choose a trustee you may wish to consider their...
- Reputation - a trustee who has a good track record and credibility will provide your venture with an assurance of quality.
- Experience - a trustee should have a wide range of experience as this will enable it to identify and help avoid issues, and to offer innovative solutions for your project.
- Network - a trustee who can draw on wider resources is likely to be able to address all the needs of your project.
- Approach - a trustee needs to be flexible, consultative and innovative and its approach should suit the way you do business.
- Pragmatism - a trustee should have the experience and pragmatism to balance legal duties with commercial realism.
What about costs?
When you are comparing proposals consider the value provided. The way a trustee works can complement your business and enhance your offering - or create delays and frustrations.