How To Invest on a Child's Behalf

Investing for your (or someone else's) children is not only rewarding but also teaches them the basic principles of investing for their own futures

Holly Cook & Fiona Harris, 6 January, 2010 | 4:51PM
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A version of this article was first published on Morningstar.co.uk in January 2010.

Giving a child an investment fund as a birthday present might not sound like the most exciting gift for an eight-year-old. After all, you're competing with gifts like Super Soakers, Star Wars stormtrooper helmets and the latest Barbie. But if you are truly out to do more than impress your child or grandchild, an investment for their future is a great alternative. And financial planners say you may be surprised at the side benefits of such a gift.

"We have a number of clients--grandparents--who insisted on taking out life insurance policies or savings plans," AMP financial Planner Mark O'Leary says. "When the money became available, the children were reminded where the funds came from, from their grandparents' hard work, and the children deal with the money with a lot more respect."

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