Collective Investment Schemes: The Role of the Trustee
Australian Accounting Review, Vol. 1, No. 3, 1992
11 Pages Posted: 15 Aug 2006
Abstract
There has been a lack of analysis of the justification for trustees in collective investment schemes. Yet a study of the topic is pertinent because of the prominent position occupied by trustees in certain schemes. One possible justification for trustees, considered in this paper, is the existence of a collective action problem. Four types of schemes are examined: debentures, public unit trusts, life-insurance firms and superannuation funds. While each of these schemes can exhibit a considerable collective action problem, only the first three typically involve a trustee. We conclude that even where a collective action problem exists, there is not necessarily the need for a trustee. There may be more efficient solutions to the problem.
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