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What does the fiduciary standard impose upon fiduciaries?

The fiduciary standard applies a “Portfolio Standard of Care,” which requires that a fiduciary exercise reasonable care, skill and caution when making investments.

  • The Portfolio Standard of Care applies to the portfolio as a whole rather than to each individual investment.
  • The fiduciary standard generally requires a fiduciary to diversify investments unless it is not prudent to do so under the circumstances.
  • The fiduciary standard allows a fiduciary to delegate investment functions when prudent as long as he/she exercises caution in selecting an agent and the agent is then periodically monitored.
  • The fiduciary standard holds a fiduciary with special skill or expertise to a higher standard of care.