The launch of a new Trust
A Family Assurance Friendly Society case study

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Page 1: Introduction

Family Assurance Friendly Society 3 Image 1All organisations must serve the needs of their customers. These needs change over time, making it necessary for business organisations to adapt their existing product portfolios continually. This case study focuses on the way in which the Family Assurance Friendly Society introduced new ethical criteria into an existing Unit Trust in response to demand from investors.

The term ‘investor’ refers to people whose expenditure is less than their income and therefore, they would like to see their surplus money grow by investing it. One of the prime considerations when choosing an investment is the potential risk and the rate of return. Clearly a good investment will provide a ‘good return’ compared with other investments. However, the return is not the only consideration.

Increasingly, investors are asking ‘What will you do with the money?’ when they invest in an organisation. All too often, media coverage has revealed organisations engaging in business activities of which some people disapprove - e.g. supporting harsh military regimes, testing products on animals, polluting the environment and so on. Investors are increasingly moving their money away from some traditional businesses to those supporting ethical principles.

This case study examines the recent launch of the Children’s Ethical Trust which provides the opportunity for savings for young people to be put into ethical investments.

Family Assurance Friendly Society

The United Charities’ Unit Trust was established in 1982 by Lord Rix of the Mencap City Foundation charity, with the aim of providing the charity’s supporters with a means of investing money where the profits were given to the charity. Over the years, Mencap has been joined by a number of other charities - The Guide Dogs for the Blind, The Royal Society for the Protection of Birds, Action for Blind People and the Country Landowners’ Association Charitable Trust.

The Unit Trust is managed by Family Assurance Friendly Society - the UK’s largest tax exempt friendly society with over 600,000 members and £1.3 billion management funds. Established in 1975, the Society is a mutual organisation owned by its members. There is a clear synergy between charitable organisations, a mutual friendly society and ethical investment. In March 1996, the investment objectives of the fund were changed to incorporate ethical criteria and the Fund became The United Charities’ Ethical Trust.

Family Assurance Friendly Society | The launch of a new Trust