prudent man rule

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Prudent Man Rule

A legal rule requiring investment advisers to only make investments for their clients' discretionary accounts that a "prudent person" would make. This means that investment advisers operating discretionary accounts are not allowed to make investments they believe will lose money for the client. It does not require that the investment adviser always make correct decisions; it merely requires him/her to make decisions that will be generally accepted as sound for someone of average intelligence. The rule has its origins in an 1830 court decision in Massachusetts, stating that trustees must manage the affairs of others as if they were managing "their own affairs." See also: Suitability rules, Twisting.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

prudent man rule

A federal and state regulation requiring trustees and portfolio managers to make financial decisions in the manner of a prudent man, that is, with intelligence and discretion. The prudent man rule requires care in the selection of investments but does not limit investment alternatives. See also investment-grade, legal list.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Prudent man rule.

The prudent man rule is the basic standard a fiduciary, who is responsible for other people's money, must meet.

It mandates acting as a thoughtful and careful person would, given a particular set of circumstances. A trustee, for example, observes the prudent man rule by preserving a trust's assets for its beneficiaries.

The prudent man rule has sometimes been described as a defensive approach to money management, putting greater emphasis on preservation than on growth. The newer prudent investor rule differs by putting greater emphasis on achieving a reasonable rate of return and by delegating decision-making to investment professionals.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
(11) I do not make any assumption on the background for allocating legal costs, in order to consider both the English ("loser pays") rule--under which the loser pays his/her own and the winner's expenses--and the American rule, where litigants bear their own expenses regardless of the outcome of the trial.
This Article offers a comprehensive examination of the origins of, rationales given for, and impact of the American Rule; then it evaluates instances in which the rule has faced legislative, judicial, and academic opposition.
Putting aside that hindsight can sometimes produce an inaccurate assessment of the facts, the "American rule" on the award of attorneys' fees is that each side pays their own.
The Court relied on the American Rule, which mandates that each litigant pays its own attorneys' fees.
American rule. The policy implications for awarding attorney's fees
In a common law tort suit, such as a car accident, in which the claim is negligence, courts follow the so-called "American Rule," where each side bears the costs for its own attorney's fees.(2) Thus, if the plaintiff prevails, the plaintiff is not reimbursed by the defendant for the plaintiff's attorney fees, which are typically calculated on either an hourly rate or a contingency fee basis.
Apparently, older generations 'celebrated' a different 'occupation day' under American rule. In her book 'Heroes and Villains,' Carmen Guerrero Nakpil describes the day, Aug.
Manila under American rule continued to exercise maritime and juridical control.
Even his choice of epigraphs and quotes is provocative; for instance, the statement of the Philippine Independence Commission in 1904: "However benevolent the American rule may be, it will remain to them [the Filipinos] foreign rule, the rule of a foreign conqueror and, as such, galling and hateful." Another one dated 1907, from William Howard Taft to President T.
Organized labor have marched every May 1 since 1903 or 125 years ago for the same cry.On May 1, 1903, when the Philippines was under American rule, the first labor union called Union Obrero Democratia de Filipinas (UODF) gathered more than a hundred thousand workers and marched from Plaza Moriones in Tondo to Malacanang, demanding for fairer working conditions.
Focus: Breach of Contract Attorneys Fees The third-party litigation exception to the American Rule allows a plaintiff to recover attorney fees incurred in third-party litigation caused by a wrongful act of the defendant.
"The law firms' view--that fee-defense litigation is part of the Cyservices rendered' to the estate administrator--not only suffers from an unnatural interpretation of the term Cyservices rendered,' but would require a particularly unusual deviation from the American Rule, as it would permit attorneys to be awarded fees for unsuccessfully defending fee applications when most fee-shifting provisions permit awards only to a Cyprevailing party,'" according to the Supreme Court's ruling.

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