The Digital and Population Data Services Agency’s policy is that no permission is required from them for UCITS-compliant products or even Finnish stocks. It is inconceivable that the legal criterion for intent or negligence would be met by following the authority’s guidance. The law, after all, never specifies all possible application scenarios in detail.
If you are really worried, you can buy the shares yourself and gift them directly. Personally, I am not worried about my child taking me to court as an adult, or succeeding even if they did.
Does anyone have first-hand information on what happens when, for example, a forest plot of some size is transferred to a minor as an advance on inheritance? The parents would presumably manage it and perform the necessary maintenance measures, etc.
There seems to be some €20,000 limit for assets. Does this lead to a relentless bureaucratic circus with the DVV (Digital and Population Data Services Agency), etc., as a result?
The comments above don’t take into account the autonomy of someone who has reached the age of 15. In my case, my daughter herself asked to open an investment account. A 15-year-old has a surprising amount of legal self-determination. A young person capable of making their own decisions can, for example, prohibit the disclosure of certain medical records to their guardians. If you clearly explain to the young person where the money is going and there is a mutual understanding, I don’t think there should be any issue with investing. With enough diversification, time will correct any mistakes. A world index via monthly savings, for instance, would certainly be a good choice.
But yeah, the €20k limit seems to be the threshold for reporting to the magistrate. She has €15k in savings, so that limit could be reached pretty quickly…
Note: A 15-year-old can also independently enter into an employment contract, but the guardian has the right to cancel it.
Stock acquisitions should be such that at least the amount of invested wealth is preserved. The law only requires a reasonable return.
These officials must be the only ones on this planet who know which stocks don’t go down and are guaranteed to yield a return.
If you’re that terrified, you don’t need to go to church to ask a mediator for advice these days; fortunately, you can actually just call these demigods and ask about every single stock purchase. They will answer yes/no as to whether you can buy a specific stock with a child’s money.
“A minor’s assets can also be invested in such a way that the investment activity ensures the preservation of the assets, a reasonable return, and sufficient diversification. The guardian makes the investment decisions, but a minor who has reached the age of 15 can also decide on their own assets, such as their earned income. Consequently, a 15-year-old could invest their assets themselves under certain conditions.”
I’m saving monthly for my child in the Handelsbanken Europe fund and the Storebrand USA fund. I’m wondering if it would make sense to add a world index fund as well to provide some diversification into other markets. There will certainly be some overlap, as a world index currently consists of at least 60% US stocks, but what do you think—would it be sensible or just unnecessary overlap?
Personally, I would choose, for example, Storebrand Global All Countries, which covers the whole world quite broadly and relatively cheaply as an index fund, or alternatively SPDR MSCI ACWI IMI UCITS ETF (SPYI) if the amount being saved is larger. Of course, a split is apparently coming to this ETF during Q1 of this year, which will also make it easier to invest smaller sums. Currently, my child’s monthly savings go into Handelsbanken Usa Index, as I believe the dominance of the US will continue in the long term, but I have certainly also been eyeing these two funds.
I guess that’s still the case, but fortunately, I wasn’t aware of yet another instance of our country’s coddling and I bought my kids a couple of risky growth stocks from across the pond without asking anyone or anyone asking after them over the years.
For example, for my younger child, whose portfolios I can still see, one shows a return of 491% and the other 152%, even though both dropped significantly in November-December. The combined balance for my two children was over €300k at its peak, but is now almost exactly €200k.
Edit: removed my own opinion on our country’s coddling and partly boneheaded regulation to avoid causing offense.
Nice story about great returns, but avoiding risk with children’s money exists for a reason. For every nice positive return on a risky growth stock, 20 risky growth stock purchases have been made where, conversely, the money went down the drain. But it’s great that you made a good stock pick!
It’s a bit like how the Digital and Population Data Services Agency (DVV) wouldn’t need to monitor my children’s assets either, but history has shown that some parents don’t understand that the children’s money belongs to the children; instead, they spend it on vacations in the sun, electronics, and booze. So, this monitoring of my children’s assets is a relatively small inconvenience in comparison.
I could provide a more detailed answer here regarding saving for my children with my own money, but I have already made a promise elsewhere not to further disrupt anyone’s peace of mind under this topic. Therefore, I will settle for wishing everyone a successful New Year, including in the investments made for their children, and will retreat to the background.
This discussion is important, and you shouldn’t leave just because someone disagrees or has a different view.
As I already mentioned elsewhere:
This specific problem can also be bypassed by acting completely according to the rules. Buy those shares for yourself and gift them to your children. But at the point when you gift money to your children, it becomes your children’s property and you can’t do just anything with it.
I wonder if it was in some interview with the head of the Women’s Investment Club?? where they talked about that whole investing-for-kids thing. This smart-sounding woman mentioned that she buys stocks for her grandchildren. Then when they’re out in the city and, for example, get into an elevator made by Kone, the woman points out to the child that “by the way, you are a part-owner of the company that made this elevator.” When I go shopping with my girl, I jokingly asked at the Lindex checkout if it’s factored into the prices at all that I’m a part-owner of this store Same at Puuilo It could be pretty embarrassing for a teenager, but then again, what wouldn’t they find embarrassing about their elders’ behavior…
Anyway, I strongly believe that buying and thinking about shares in Finnish quality companies can, at its best, be a shared hobby for the whole family. Plus, when looking at the aforementioned global fund’s annual return of approx. 9% vs. my own portfolio’s annual return of approx. 33%, for the coming year we’re starting off with moderate stakes in direct stock purchases, analyzing them together with my daughter. That way, the learning comes along with it. We’ll buy index funds a bit later. And daddy pays if it goes into the red Every family should do whatever feels right for them.
My comment on the responsibility of investing children’s money.
I saved over a thousand euros for my children in investments, and they gradually withdrew almost everything after they turned 18. I didn’t bother saving more because I had taken this risk into account. That risk then became a reality. Now they have already started to save a little independently, as almost a year has passed since they reached legal age.
Are my children now liable to me because they acted against my wishes? They are not. Still, I gave them a talk about why I was afraid of those withdrawals, especially since they claimed they didn’t know how to use an investment account. Well, they certainly knew how to withdraw the money!
When you manage children’s savings carefully and don’t take too much risk (i.e., investing in low-risk funds, which I consider basic index funds to be), you won’t be held liable for compensation. If anything, you should be held liable if you don’t save for your children at all, or if you only save in a regular bank account. There, the value of the money is 100% certain to decrease all the time, yet no one is held liable for that.
Generally speaking, what is currently the most sensible form of investment for a child (due this spring)? The specs: Two working average Joes. Since we aren’t internet rocket scientists, the plan is to invest a total of about €50/month for the child, as the rest of the money is needed for living, hobbies, our own investments, and, well, life. Is there any point in an insurance wrapper? If I’ve understood correctly, those have some running costs in addition to fund fees. Would you invest in your own names or the child’s name? OP is offering €100 in starting capital for those born this year, and as customers, we were thinking of taking advantage of that. Does this mean the investments have to be in the child’s name at OP? Right now, the idea is to invest that money into a world index using a buy-and-forget strategy. By a quick calculation, that would result in a pot of about €22,000 for the child over 18 years.
At least regarding that investment, it definitely needs to be in the child’s name. In my opinion, investments should absolutely be in the child’s name. It’s a shame I didn’t take advantage of that OP offer for either of my children.
A book-entry account is likely the most flexible option. Costs eat into returns. An instrument with the lowest possible costs is in the individual’s interest in the long run.
You do indeed take that risk. Our oldest is soon turning 18 and will get a portfolio of a few tens of thousands, regarding which it has been agreed that I’ll continue saving into it on the condition that the use of the portfolio is discussed together. The junior has quite sensible plans, but there’s always the risk that a year-long trip around the world might end up being more appealing. That’s just how it is; I don’t stress about the portfolios saved for the children.
The topic of this thread is becoming relevant for me, so I’ll jump in and join the debate.
I’m starting to lean toward the idea that accumulating wealth in a child’s name isn’t the smartest way to build intergenerational wealth, unless you have wealth “to a fault” (a few million might not be a problem yet). Instead, it’s better to accumulate as much wealth as possible in one’s own name and support the child reasonably without skimping on costs. This assumes tax practices don’t change significantly over time and that I’ve understood them correctly
My train of thought:
The purpose of accumulating funds is to secure the child’s financial future (a so-called nest egg).
Parents are responsible for the child’s maintenance until age 18 or the end of high school anyway.
Even after that, one can cover the child’s running expenses as a Maintenance Gift (elatuslahja), and there seem to be no age limits on this? I assume it’s fine at least during university studies. Verovapaat lahjat - vero.fi
Behind this is also an educational thought: it’s ultimately better in every way to earn your own money rather than just being given it. However, with this approach, the child still gets a solid foundation to start from. There’s also no risk of mom and dad’s hard-earned savings being wrapped around a lamp post in the form of a BMW in the winter of 2045
We’ll probably still practice investing with some smaller amounts, but the intention isn’t to accumulate massive sums before they reach adulthood.
Same at Puuilo 
