1. What is the worst-case scenario for a trust to lose money? Trusts are not capital-guaranteed products. There is a possibility of losing principal, and investors must bear the principal losses themselves.

The credit risk of trust products refers to the risk of losses caused by counterparty default.

Credit risk trust products are mainly controlled through guarantees.

According to the "Guarantee Law", legal guarantee forms include guaranteed mortgages, pledges, liens and deposits. The first three are commonly used in the design of trust products. Among them, the guarantee measures used in trust products are mainly third parties providing guarantees to provide guarantees for trust products. The third

The three parties that have emerged in practice mainly include commercial banks, China Development Bank, large enterprises, and local governments, which are more special.

According to the "Administrative Measures for Trust Investment Companies", trust investment companies are not allowed to issue entrusted investment certificates, agency investment certificates, income certificates, and securities custody orders.

This means that existing trust beneficiary rights can only be established by contract rather than trust beneficiary certificates.

and cannot be standardized for segmentation.

The private placement nature of the trust contract and the 200-unit limit make the secondary market transaction costs of trust products extremely high.

Existing online transfer, bank and other transfer methods cannot meet the demand for liquidity.

2. The worst consequence of trust?

As we all know, any investment product faces certain risks. For trusts, if the worst happens, will the principal be lost if the trust investment fails?

Many customers who have just started to understand trusts are overwhelmed by the thought of "losing all their money" and "losing their principal" before they even start looking at the project.

A trust can easily cost 1 million or 3 million. If the worst happens, will it be wasted and the principal will not be returned?

Here, it should be clearly stated that "trust" is called "industrial investment bank" and has the broadest investment scope.

Trust licenses are known as the "scarce" and "most versatile" licenses. Due to domestic financial controls, trust licenses have a very wide investment scope. They can allocate assets across capital markets, currency markets, and industrial markets, and can integrate and use almost all

Financial tools, carry out investment and financing, equity, asset management, and carry out various financial businesses such as financing, loans, securities investment, bond underwriting, equity investment, etc.

At present, the trust market can be divided into three categories: active management, passive management, and transaction management.

It can also be divided into debt trusts, equity trusts (equity, private placement, secondary market, etc.), charitable trusts, art trusts, family trusts, etc.

But what ordinary investors most commonly see is a debt-based fund trust plan.

Therefore, when you see news or reports such as "investment trust failed and lost all your money", you must first clarify the nature of the project. What type of trust did not receive the money and why did it not receive the money?

Is it related to the type of project you plan to invest in?

To be honest, there are situations where investments fail and suffer substantial losses, such as: 1. Passive management Passive management trust: The trust company does not have the discretion to use the trust property, but relies on the trustor or the trustor with the authority to command.

A trust that manages and disposes of trust property under a person's instructions.

It has the following main characteristics: (1) The trustor or its designated third party is responsible for the due diligence before the trust is established.

Trust companies have the right to conduct independent due diligence on the legal compliance of trust projects.

(2) Matters such as the establishment of a trust and the use and disposal of trust property shall be decided independently by the trustor or shall be clearly agreed in advance in the trust document.

(3) The trust company only performs management duties that must be performed by the trust company or must be performed in the name of the trust company in accordance with the law, including account management, liquidation and distribution, and providing or issuing necessary documents to cooperate with the trustor in the management of the trust property.

(4) When the trust terminates, the trust property will be transferred to the owner of the trust property rights in its actual existing state, or the trust company will dispose of the trust property according to the instructions of the trustor.

Here, the trust company does not actively operate, but only provides a channel. The customer's funds are transferred into the account of another institution, and then the institution and the trust company are connected. The customer does not directly interact with the trust company; it is similar to the role of a bank as a lending channel in entrusted loans.

Meaning, if something goes wrong, the trust company will definitely not take the blame. Affairs management can help customers solve tax planning, affairs management and other issues by setting up movable property trusts, real estate trusts, equity holding trusts, family trusts, testamentary trusts and other products.

.

Focus on service, not to make money.