Can trustees act on their own or jointly?

I am looking at a Will trust created on death of Mr A. The trustees are Mrs A and brother of Mr A.

We have become involved in a situation where an investment firm has been acting on the sole instruction of Mrs A. They don’t have a copy of the trust deed nor any information about the brother.

Leaving aside the documentation failure and AML breach in not identifying the brother, I cannot see an obvious clause setting out if the trustees can act independently.

There is a clause which states:

“no power except the power to appoint new trustees shall be capable of exercise unless the trustees shall consist of at least two trustees or a trust corporation”.

Is that clause saying that all decisions except the appointment must be taken jointly, or is it simply a requirement to have two trustees?

Also, what generally would be the implication for Mrs A, when she has acted on the advice of a regulated adviser (and discretionary manager), without consulting the other trustee? Whilst liability is ultimately hers, to what extent can she reasonably complain that the professionals she’s appointed have failed to carry out basic information gathering?


Trustees must act unanimously unless the trust instrument specifically provides otherwise.

The provision quoted is fairly standard and essentially requires there to be at least 2 trustees to exercise the trustees’ powers, which will include the power of investment and the power to appoint an investment adviser (except for the power to appoint an additional trustee where only 12 trustee remains – usually following the death of the other trustee).

On the basis that the investment firm is regulated, it appears to have fallen far short of the regulatory requirement to “know your customer” as it will have been required to have sight of the trustee instrument and to identify and verify the identities of the trustees. By accepting the “business” without complying with its regulatory obligations, the investment firm is at fault and may be liable to reconstitute the trust fund, should the investments have reduced in value. If there has been an overall gain, I believe the trustees will be entitled to retain that.

I wonder, though, if Mrs A incorrectly lead the investment firm to understand that she was looking for them to manage her personal monies and not a trust fund. If she has mislead them, it may be difficult to establish that they have failed in their KYC obligations unless there is reference to the trust in the fact-find that should have been completed as part of the investment adviser’s “onboarding” procedure.

I suggest a first step is to request from the investment firm a copy of the fact-find and other documentation from when the investment account was set up (they will want authority from Mrs A to communicate with you), to establish exactly who it understood it was acting for – Mrs A or the trustee(s) of the trust fund.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

Thanks Paul.

Noted your comments re Mrs A and personal funds but this is categorically not the case (investment firm has the accounts in the name of the trust and has recently ceased taking instructions due to not having a valid lei - but unconcerned about not having a trust deed or aml on the brother).

Your reply has fully reinforced my current line of thinking. There have been significant and detrimental failings on both personal and trust assets in a period we can establish goes back at least 6 years, with considerable potential financial loss.