The substantial increase in the investment powers given to trustees by the Trustee Act 2000 should mean that it will be rare that they will consider their powers to be too narrow. However, there may be some instances in which they seek wider investment powers, for instance permitting the purchase of property overseas, or clarifying whether they are permitted to assets which produce no income. There are a number of ways in which this may be possible.
Power of variation in trust deed
Some trust deeds contain provisions under which alterations or amendments to the deed can be made. For instance, the Universities’ Superannuation Scheme Rules provide that the rules can be altered by deed, with certain restrictions concerning maintaining the purpose of the scheme to provide pensions and other benefits for eligible employees, and subject to certain consents.
Consent of beneficiaries
Where all the beneficiaries of a trust are ascertainable and, being competent to do so, give their consent, then new powers of investment proposed by the trustees may be adopted.
Variation of Trusts Act 1958
Where it is not possible to obtain consent from all the beneficiaries of a trust, or some of the beneficiaries of the trust are not competent to give consent, and in certain other cases, the Variation of Trusts Act 1958 will apply. This enables the court to approve a variation of trust, including a variation of investment powers, on behalf of the unascertainable or incompetent beneficiaries. This Act does not permit the court to consent to a variation on behalf of ascertainable and competent beneficiaries who have not been consulted (even where to do so would be inconvenient) or to override a refusal of consent by such a beneficiary.
Trusts Act 1925, s 57
This section authorizes the court to approve a transaction, either exceptionally or generally, and has been held to be wide enough in scope to authorize extended investment powers. It has an advantage over the Variation of Trusts Act 1958 in that it does not require the beneficiaries to be consulted or to agree to the enlargement of the investment powers, although the court will not approve the variation unless it can be seen as being in the general interests of all the beneficiaries. In Anker-Petersen v Anker –Petersen,  16 LS Gaz R 32 it was suggested that applications for extending powers of investment were more appropriately brought under s 57 than under the variation of Trusts Act 1958. This was because it was more realistic for the court to consider the matter on behalf of the beneficiaries as a group rather than individually, as the 1958 Act required.
Principles on which court grants approval
In a case decided shortly after the passing of the Trustee Investments Act 1961, Re Kolb’s Will Trusts,  Ch 531, it was said that the investment powers in that Act should ‘be taken to be prima facie sufficient and ought only to be extended if, on the particular facts, a special case for extending them can be made out,’  Ch 531 at 540. Subsequent cases departed from that view and showed a greater willingness to entertain requests for enlarging powers of investment. Thus, in Mason v Farbrother,  2 ALL ER 1078, Blackett Ord V-C approved a considerable widening of powers of investment of the trustees of the Co-Operative Wholesale Society pension fund, and in Trustees of the British Museum v A-G Megarry V-C approved the enlargement of the investment powers of the trustees of a museum of international importance.
The first case was dealt with under the provisions of the Trustee Act 1925 s 57, and the latter under the Variation of Trusts Act 1958, but there does not seem to have been a difference in approach. Relevant factors included the quality of the advice available to the trustees, and the measures which were to be taken to balance risk and safety. The division of the trust fund into separate parts with different risk profiles was considered to be an important factor in granting approval.
In Steel v Wellcome Custodian Trustees Ltd,  1 WLR 167, Hoffman J approved almost unfettered investment powers with no obligation to divide the fund into divisions for the trustees of an extremely large charitable foundation. He had regard to the size of the fund, the eminence and experience of the trustees, and the provisions in the proposed scheme for obtaining advice.
It is only possible to speculate what approach would now be taken by the courts in deciding whether to grant extended powers of investment, the width of the powers given by the 2000 Act might mean that there would be the same kind of reluctance to entertain an application as happened in Re Kolb’s Will Trusts. Since the current legislative regime does not require any division of the trust fund, it is unlikely that a court would insist on it if granting enlarged powers, but the factors identified by Hoffmann J would still surely be relevant in deciding whether an extension of powers was appropriate.