Managing Investments for Friends/Family

Does anyone manage their families/friends investments on their behalf?

Either doing it for free or charging a small fee?

How have you set it up legally and how does the arrangement feel knowing it is someone else's money as opposed to yours. Are you more aggressive or conservative, do you have rules and reporting in place?

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Originally Posted by epower

Does anyone manage their families/friends investments on their behalf?

Either doing it for free or charging a small fee?

How have you set it up legally and how does the arrangement feel knowing it is someone else's money as opposed to yours. Are you more aggressive or conservative, do you have rules and reporting in place?

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I am managing my father's capital account. I hold his authority to do that ... and I did set (myself) some rules about how to manage this money (like minimum credit rating and mix of considered securities). I consult as well on material decisions with an expert my father used to trust as well and take my father's views (or known previous views) into account. Primary target is to have a reasonable return on his capital while making sure that the money will outlast his needs (he is 86 and needs to pay for care). The money is hold in his name - i.e. no problem to keep apart from mine ... makes it as well easy for the relevant IRD (the money is not in NZ).

Some informal reporting (once a year) to the family ...

I charge no fee, however assume that (at least some of the money) will be at some stage mine, i.e. I am motivated to do a good job ;);

Doesn't feels different to managing my own money ... just a bit more conservative (i.e. less risk taking).

Why do you ask?

I am doing this for a family member but only investing through Harmoney due to the amount of money etc. Investing for someone through Harmoney is very easy to manage. I don't have any experience with doing other investments on behalf but I am sure shares etc will be a lot more complex with the cashflows and accountability.

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Originally Posted by BlackPeter

Why do you ask?

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Thought my parents may ask me to do this for them in the near future so wondering how others do it.

Would be good to put my knowledge to good use for others as opposed to just myself.

I do this for my 4 children and also for father in law. The children's money is managed through our family Trust and charge no fees. This money is invested fairly aggressively on the NZX and only money taken out so far is top ups to Kiwisaver to ensure the full Government subsidy for the children that have turned 18.

The portfolio for father in law is done in my wife's name (he lives overseas) and is mainly targeted on good steady companies on the NZX that pay high dividends. His instructions were capital preservation and good dividends. So very different to the children's much more aggressive portfolio.

I feel relaxed and good about managing my children's portfolio (13-22 yo) but more hesitant with father in law so we wrote down a set of rules signed by us both before he sent us the money.

Did it for a couple years for a friend of my fathers ....over the first year it worked out at the end I'd increased his capital by 5k per week on average(yes some qtr mill profit p.a) ....Glad when he was happy to take his profits(was stressful to manage such a large amount of capital + my own on limited time frames) ...ended up leaving a much smaller amount which did get hammered in the following year ...from a mix of not having the time esp in the higher risk sectors I was now investing the smaller amount of capital ....

Overall pretty stressful ...

Do not recommend it.. Found that it was stressful just having my Mothers money on bank deposit..

Yes Mum .. It is safe.. etc..

I manage this for two people. Not so much stressful as time consuming. Its a matter of not being too conservative, growing the capital, minimising tax exposure, getting a regular income and keeping assets separate. No reporting as such, but have to keep accurate records