A master trust allows an investor to hold a portfolio of managed funds under the one umbrella. It is often used by financial advisers as an easy way to manage their client's portfolio of investments.
Master trusts are good for investors with large amounts of money to invest (for example $2,000,000), and who want the convenience of one report for multiple investments. They can also be a convenient way to reduce financial adviser costs.
A master trust might provide you will access to wholesale investment options you might otherwise not be able to access individually. They can also make it easier and cheaper for your financial adviser to manage your investments.
Master trusts investments are typically held by a trustee on behalf of the investor, with the value of an account determined by the trustee based on the value of the underlying investments.
A few things to consider
While there are many positives with master trusts, you should also be aware of their potential downsides.
You may incur addition fees from your financial adviser for administration and buying and selling investments.
The underlying wholesale managed funds are usually specific to one master trust. This means they are not portable. So if you want to change your financial adviser you will have to sell all your investments, which may result in capital gains where you will be taxed at your marginal tax rate.
Want to know more?
General advice disclaimer
This is general information only and does not take into account your personal objectives, financial situation or needs. You should assess whether the information is appropriate for you having regard to your objectives, financial situation and needs and consider obtaining independent professional advice before making an investment decision. If information relates to a specific financial product you should obtain a copy of the product disclosure statement for that product and consider that statement before make a decision whether to acquire the product.