There has been a lack of analysis of the justification for trustees in collective investment schemes, although a study of the topic is pertinent because of the prominent position occupied by trustees in certain schemes. One possible justification, considered in this paper, is the existence of a collective action problem. Four types of schemes are examined: debentures, public unit trusts, life‐insurance firms and superannuation funds. While each of these schemes can exhibit a considerable collective action problem, only the first three typically involve a trustee. We conclude that even where a collective action problem exists, there is not necessarily the need for a trustee. There may be more efficient solutions to the proble