Prudent Investor Act

The Prudent Investor Act, adopted in many states (but with often significant variations) is a law that addresses how a fiduciary (a person in a position of trust, such as an executor, guardian or trustee) must invest monies. In general, unless the trust, will or other governing document provides differently, the assets must be invested in a manner that comports with modern portfolio theory, diversification, consideration of risk and investment returns for the entire portfolio, not on an individual by individual security basis.