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prudence and diligence. All provinces (except Quebec) use some variation of the prudent investor rule. Under this rule, a trustee is required to exercise care, skill, diligence and judgment that a prudent investor would when making investment decisions.
A prudent investment refers to the recognized use of financial assets that are suitable for an investors goals and objectives. A prudent investment considers the risk/return profile and the time horizon of an investor.
The prudent investor rule is a legal guideline for trustees of investment portfolios. It requires a fiduciary to act in the best interest of the trusts beneficiaries and outlines standards for legally controlling investment portfolios.
Key Takeaways The prudent investor rule states that trustees must only invest clients funds in ways that could reasonably be expected to perform well.
The Prudent Expert Act requires fiduciaries of defined contribution retirement plans to use a high standard of care, diligence, prudence, and skill when they manage portfolios. The rule is contained in section 404(a)(1)(B) of the Employee Retirement Income Security Act.

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PRUDENT. The prudent investor rule is a legal guideline for trustees of investment portfolios. It requires a fiduciary to act in the best interest of the trusts beneficiaries and outlines standards for legally controlling investment portfolios.
The prudent investor rule means that in making investments the fiduciaries shall exercise the judgment and care, under the circumstances then prevailing, that an institutional investor of ordinary prudence, discretion, and intelligence exercises in the management of large investments entrusted to it, not in regard to