Investing for Children (usually by their relatives)

Written on the 11th of March 2010 by Continuum Financial Planners Pty Ltd

From time to time we are asked about investing for children’s futures. This is a difficult one to provide a ‘one size fits all’ appropriate response because, like most situations, individual family situations vary from client to client. The most difficult thing for us in this arena is that we are more focused on providing strategic advice than we are product advice (and that is not to say that we don’t ‘know the product’ – as you may understand from matters below)!

Circumstances under which investing for children (by relatives/ adults on their behalf) might arise, include –

• Cash gifts from relatives or friends: often a once-off (or annual) event;
• Savings plans with either simple or strategic goals (for instance – Simple: may include saving to have a ‘good start’ in life at some designated age or event; Strategic: may include saving to ‘fund higher education’).

Products that might be used, include –

• Direct shares parcel/ portfolio
• Managed investment funds portfolio
• Savings accounts
• Insurance bonds
• Scholarship accounts

Issues that need to be considered, include – access to the funds; taxation; security; liquidity; and suitability. There are a number of articles on our website that deal with some of these matters: go to www.continuumfp.com.au and type a subject name (see bold words above) in the Search bar to read what we have had to say about the matter.

Call our team – on 07 3421 3456 – or use our website to Contact Us to discuss whether there are matters in this article with which we can help you.