Testing Times, Part 2

< 1 minute read

In a follow-up to his article of October 2016 in the STEP Journal, Quintin discusses the pros and cons of different types of portfolio stress tests, which trustees may use to address concerns about the impact of extreme market events on portfolios, and help them meet fiduciary responsibilities.

Stress tests can help to assess the adverse impacts of extreme market moves on portfolios. Different types of stress tests have advantages and disadvantages that make them more (or less) appropriate for addressing specific concerns.  Appreciating different stress-testing approaches helps critically appraise proposed test suitability, helping ensure robust outcomes when determining the impact on portfolios and any resulting restructuring.

With guidance, trustees may be able to determine the impact on portfolios and arrange for restructuring to limit the downside. Protecting portfolios from adverse consequences of extreme events is possible, and, in the process, trustees will have made an active contribution to fulfilling their fiduciary duties.

This paper is the second in a series that forms a helpful introduction to practitioners and trustees less familiar with portfolio stress-testing.


STEP is the global professional association for practitioners who specialise in family inheritance and succession planning. STEP works to improve public understanding of the issues families face in this area and promotes education and high professional standards among its members.

STEP members help families plan for their futures, from drafting a will to advising on issues concerning international families, protection of the vulnerable, family businesses, and philanthropic giving. Full STEP members, known as TEPs, are internationally recognised as experts in their field, with proven qualifications and experience.

Download the Testing Times (ACCA)

Q G Rayer (2017), Testing times, part 2, STEP (Society of Trust & Estate Practitioners) Journal, volume 25, issue 3, pps66-69, April 2017.

Download Article