 Section 4 of the Act requires trustees to look at the " standard investment criteria " when investing . These criteria are defined in Section 4 ( 3 ) as the need to check the suitability of investments for the trust , and the importance of diversification . Section 4 ( 2 ) requires that , having exercised their power of investment , trustees must regularly refer back to the standard investment criteria to check that they are being fulfilled . This does little more than restate what is given in the Trustee Investments Act 1961 , however , and this provision has been criticised for not defining " suitable " . In Cowan v Scargill [ 1985 ] Ch 270 Megarry VC suggested that trustees have an overriding duty to invest solely in the financial interests of beneficiaries , unless the trust instrument laid down otherwise . So even though the National Union of Mineworkers ' leader , Arthur Scargill , wanted the mineworkers ' pensions to be reinvested in the British Coal industry and keep jobs , the court held that because this would make less money than other investments it would be a breach of trust . Subsequent case law has qualified this controversial principle , such as Harries v The Church Commissioners for England [ 1992 ] 1 WLR 1241 , and it is a point of ongoing debate . It is assumed by academics that , if a trust suffered a loss as a result of a trustee investing in unsuitable areas , the trustee would be liable for breach of trust . 
