Parish Councils: Long-term Investing Paul Roberts proberts@arlingclose.com

With short-term interest rates currently close to zero, and expected to stay that way for some time, trying to achieve the ‘yield’ in the CIPFA Code’s trio of ‘security, liquidity and yield’ is likely to remain a challenge for a while yet. Even with inflation relatively low in historic terms, investing only in cash will slowly erode the purchasing power of any council’s investment portfolio.

One way many of our clients attempt to overcome this is by investing in longer-term pooled funds.  These funds generally have a recommended time horizon of 3-5 years plus, with the aim of generating meaningful levels of income and the potential for inflation-beating capital returns.

We have advised Parish councils on these investment vehicles for many years as they offer the ability to access asset classes such as bonds, equities and property in a professionally managed way, and provide a route to achieving diversification.

Making an investment for the long-term requires careful consideration and planning, including assessing the council’s individual requirements to capture its return objectives, risk tolerance, and financial strength to ensure all are consistent with making an investment that should not seriously impact the main objective of the council to provide services to local residents.

For parish councils considering this investment route, Arlingclose can prepare a suitability report; a document which brings together all of these factors and provides a recommendation on the proposed investment. Each report is tailored to the individual requirements of the council and can wide or narrow in scope, depending on what is required. Do you want a broad, more general investment review and recommendation covering a number of pooled funds, or is the focus narrower, potentially down to determining whether a single fund represents a sensible course of investment action?

We can also assist parish councils looking to make investments that are aligned with certain principles and values, be them along ethical lines for example, or in accordance with ESG (environmental, social and governance) factors.

Based on all the information gathered, together with any subsequent discussions with you , our service will present suitable options that are consistent with the council’s risk and return objectives, as well other important criteria the council may wish to include.

To discuss how our parish council investment advice might help you achieve your longer-term goals please contact the Arlingclose team at info@arlingclose.com

Related Pages

Parish Councils: are your deposits protected?

Parish Council Financial Advice

Parish Council Investment Advice