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How do I implement an investment change?

The first issue is whether you are only advising the client, or whether you are authorized to exercise discretion to make investment changes.  In either case, as a fiduciary, changes to the investments in the account must be made in accordance with the principles of prudence.

You must take into account all relevant factors in making a recommendation or exercising investment management discretion, and be able to discuss and document the changes and your reasoning behind the proposed changes.  You need to have considered your client’s goals and objectives, and also your client’s Investment Policy Statement (IPS).

Clearly document the changes and the prudent process used to recommend or direct them.  Where your advice is merely advisory, present the information to the client for his or her decision and answer questions.  

Download the Client Goals & Objectives Worksheet >

Download the Sample Investment Policy Statement Template >