Under the original legislation, such accounts have to be subject to ‘lifestyling’, the process by which the provider adopts an investment strategy that aims to minimise variation in the capital value of a CTF caused by market conditions, as the account nears maturity.

It must commence for all stakeholder CTF accounts on or before the account holder’s 15th birthday, unless the registered contact for the account (usually the account holder’s parent) has instructed otherwise.

In practice, this means account providers have to adopt an investment strategy that increases the proportion of less risky investments held in an account as it approaches maturity.