Trust management is an asset management activity. They are provided by the investor to a professional market participant. The main goal in this case is maximizing profit at a certain risk. Let us further consider the essence of trust management.
Assets
Most of the objects listed in the Civil Code act as them. Art. 128 contains a list of such assets. Objects of trust management are, first of all, finances and material values. An investor can also provide stocks, real estate and so on. Assets also include property and exclusive rights (to works of art, literature, company name , etc.). Intangible goods are not included in this category .
Features of the provision
Trust management is a transaction involving the legal provision of an asset. If, for example, an enterprise acts as it, then maintaining it as an independent legal entity is practically impossible. This is due to the fact that the trust management of an LLC or other organization is reflected by the responsible person on a separate balance sheet. Material assets are kept records. At the same time, a separate bank account is opened for performing settlement operations. Granting in trust of intellectual property, exclusive rights to non-profit organizations should be distinguished from their transfer under a concession agreement. In the latter case, the transaction is concluded with the aim of the investor conducting independent entrepreneurial activity.
Item isolation
In legislation, except in exceptional cases, there is no direct prohibition on the transfer of things characterized by generic characteristics. Meanwhile, the structure of the agreement, the peculiarities of the interaction of entities, the list of assets indicate that the transaction can be concluded only in relation to individually defined items. Material values must be isolated from other goods belonging to the owner and manager. In this regard, even objects that are determined by generic characteristics (for example, sets of linen in the heritable mass), to a certain extent, acquire individual certainty.
Financial organizations
In accordance with the general rule, trust management of funds is not allowed. However, the law provides for exceptions. So, according to Art. 5 Federal Law "On Banks", the credit structure - a legal entity licensed to conduct relevant activities issued by the Central Bank - can carry out settlement and other operations, conclude an agreement on trust management of client’s property and finances. In this case, both the organization and the citizen can be the last. Structures that are not credit can also receive the right of trust. To carry out relevant activities, they must have a license, which is granted in accordance with Art. 7 of the Law of February 3, 1996
Municipal and federal property
Transfer of property to trust has its own specifics, which must be taken into account when concluding transactions. So, for example, for performing certain operations by a professional market participant, he can be provided with both private, state or municipal property. However, tangible assets that were previously provided to a unitary enterprise or institution must lose their legal status before being transferred to trust. This is due to the fact that the benefits are already provided to the subject and are used in a limited mode. The provision of material assets to a professional market participant would make it impossible for a unitary enterprise, municipal or state institution to realize its legal capabilities.
Subjects
The parties to the transaction may include:
- The founder of trust management.
- Beneficiary.
- Manager.
The first two participants may coincide (which is most often the case in practice). The manager acts as an independent individual and does not coincide with either the beneficiary or the founder, since their functions are completely incompatible. If the activity is carried out on the grounds established by law, it may be an individual who does not conduct entrepreneurial activity, or a nonprofit structure (except for the institution).
Nuances
Trust management is a voluntary transaction. Assignment of the entity responsible for asset management is carried out only with his consent. A model of trust management can provide for both onerous and gratuitous basis of relations. The decision on the provision of material assets is made by their owner. It is he who acts as an investor and, accordingly, the founder of the management.
Provision of capital
Trust management of money involves not only their preservation, but also multiplication. Finances are provided for a specific period. For operations with financial resources, the manager, as a rule, receives remuneration. It is worth noting that, until recently, such transactions were concluded only by wealthy people. Today, there are organizations that accept trust in the amount of $ 1 million. However, there are currently quite a lot of companies to which you can transfer smaller capital. Basically, the minimum amount is 200 thousand rubles. If the investor has, for example, 50 thousand, then he can still transfer them to management. Such small amounts are pooled. With them, the manager conducts the same operations as with the funds of one investor. But in the latter case, the individual wishes of the client are taken into account. Legislation also allows for trust management of equity interests.
The timing
As a rule, an asset trust agreement is concluded for a year. According to experts, investing for a shorter period is impractical. Meanwhile, today there are companies that can take assets for 6 months. The management agreement usually provides for the possibility of withdrawal of material assets before the expiration of the agreed period, as well as the automatic extension (extension) of the agreement.
Advantages and disadvantages
In comparison with a bank deposit, trust management is considered more profitable. However, there is always a risk of not making a profit at all. Neither the private manager nor the company can guarantee a fixed income. In practice, it may happen that the investor not only does not earn, but also loses his capital. Moreover, he will have to pay the manager remuneration under the contract.
Remote control and mutual funds
Trust management has much in common with mutual funds. Experts recommend studying these types of activities in more detail. In both cases, the manager’s task is to preserve and increase the investor’s capital. However, the services of companies have different legislative regulations. In trust management, the use of options, futures and other derivatives not available to mutual funds is allowed. In the event of a market fall, a professional participant may sell financial instruments. But at the same time he is limited in his actions. For example, a manager cannot play on lowering the market, concluding "short deals". This is due to the fact that he is prohibited from borrowing shares and lending. Legislation, giving companies the right to trust property, protects private investors. One of the mechanisms is the ban on obtaining any loans.
Efficiency and individual approach
The undoubted advantage of trust management is the ability to withdraw funds on the day the claim is received from the client. With mutual funds, such an operation is performed within three days. At the same time, during this period, the state of the market can significantly change both in the negative and in the positive direction. With trust management, a professional participant personally works with the financial assets of the client. Even if they are combined in pools, the number of investors in it is significantly less than in mutual funds.
Securities trust management
It involves ensuring a high return on investment. A broker acts as a guarantor of the safety of the client’s assets. Investor funds are placed in the clearing house, and securities - in the depository of the exchange. The broker's tasks include keeping records of the movement of money and shares of the client, calculating and withholding income tax. When choosing a company, it is necessary to take into account the duration of its activity in the market, as well as the volume of its customer base. Accordingly, the larger and longer the broker works, the higher its reliability.
Important point
When transferring assets to a trustee, the client seeks to obtain guarantees of the profitability of his investment. However, in accordance with the Federal Law governing the circulation of shares, it is forbidden for a professional market participant to give such guarantees. Together with these norms, the trustee may publish the historical profitability received by him in previous periods.
Real estate as an asset
The essence of trust management in this case boils down to the fact that the owner, who, for example, wants to lease the premises or structure, leans all the worries to the realtor. When entering into a regular agreement, the agency acts as an intermediary. His tasks include only finding a tenant. Trust management involves a significant expansion of the functions of a realtor. Their list will depend on the needs and capabilities of the owner. The agency is not only looking for a tenant, but also develops and signs an agreement with it, receives payment for the use of the facility, monitors the timely payment of bills, fulfillment of obligations by the tenant, and so on.
Conclusion
Trust management is now included in the list of services provided by many banking organizations. As a rule, large financial companies take on such tasks. At the same time, according to some experts, it is more expedient to entrust the management of your assets to banks. This is due to the low cost of services compared to brokerage organizations. The fact is that the banking structure does not need to recruit an additional staff of employees who would carry out trust management. It is enough to add these functions to the duties of existing specialists. Trust management is very popular today. This is a passive way to generate income. However, it requires certain financial investments. Companies providing such services offer various options for increasing investor funds. Undoubtedly, there is a certain risk in each transaction, but income can be quite high. Trust management is a convenient way to increase your capital. Moreover, the investor does not have to understand all the intricacies of this activity.