Introduction
Trust investment institutions, also known as trust companies, are professional financial institutions established according to law to provide clients with liquid asset management, investment and financing, asset allocation and integrated financial services. The trust company has a long history, the predecessor of the trust company is the trust company established in 1836 by American financier William Mcgregor. In January 1858, the first Chinese trust company, the National Bank, was established in Shanghai. After the founding of New China, Chinas trust industry has gone through four development stages, and the industry has made great progress. Today, the trust company, as an important financial intermediate institution, is playing an ever growing, more and more important role in investment and financing, asset allocation, fund trust and other economic activities.
History
Trust companies began to appear in the United States in 1836. Under the background of market economy, financial intermediation has become more and more active, the financial and capital market develops faster, and the public needs more and more diversified financial products, so trust companies are becoming more and more popular. After more than a century of development, trust companies have become the cornerstone of financial intermediation in the United States and other countries. In the 1920s, trust companies in the United States began to experiments in the organization of syndicates, risk and earn profits of financial products, the establishment of inter-industry and diversified investment trust, etc., thus enhancing the trust companies in finance, securities and other fields recognized.
After the founding of new China, the situation of Chinas trust industry is completely different from that of developed countries, and it is at a stage of initial exploration. In 1999, with the approval of the State Council of the Peoples Republic of China, trust companies were officially established in China. The purpose of the establishment of trust companies is to market the development of Chinas real estate industry and to strengthen the ability of enterprises to seek capital, which is the inevitable demand of economic development. After that, the government has successively issued a number of regulatory policies, which further clarifies the qualifications and responsibilities of trust companies, thus forming a relatively complete system of trust industry standards. In 2005, Chinas trust industry as a whole has fully entered the development track to enhance the trust services, particularly in the construction trust fund, asset management, project trust, financial engineering and other areas have made rapid progress.
The Role of the Trust Investment Institution
Trust companies are a kind of professional financial intermediary institutions. They provide trusts, financial products design and asset management services for customers. Their basic role is to provide diversified technical services for customers and broaden their investment channels.
First, trust companies provide more diversified financial products energy. Designed for customers with different investment requirements to study and design more demand-oriented personal financial services and products based on personal financial targets, preferences and other factors, such risks as repayment ability, capital preservation and return on investment, etc.
Second, trust companies provide professional risk management services. Through professional risk analysis and prudential risk control, they eliminate malicious competition in the capital market and increase the safety of its investment.
Third, trust companies provide targeted asset allocation services. Individuals or institutions can manage their assets by using the trust fund to diversify their investments and achieve the goal of maximizing their return.
Fourth, trust companies provide professional asset management services. They have the ability to make combined and comprehensive allocations of trust funds in combination with clients’ requirements, financial objectives, risk tolerance, asset equity and debt structure, etc., to give full play to their asset appreciation potential.
Conclusion
The trust investment institution is a professional financial intermediary institution. Its business content includes liquid asset management, asset allocation, investment and financing, fund trust and other financial areas. With the deepening of economic development, the trust industry is also on the rise. The trust company plays an increasingly important role in investment and financing, asset allocation, fund trust and other economic activities, and its contribution to the healthy development of the national economy is becoming increasingly significant.
