Uniform Prudent Investor Act
The Uniform Prudent Investor Act (UPIA), which was adopted in 1992 by the American Law Institute's Third Restatement of the Law of Trusts ("Restatement of Trust 3d"), reflects a "modern portfolio theory" and "total return" approach to the exercise of fiduciary investment discretion. Approach. This approach allows fiduciaries to utilize modern portfolio theory to guide investment decisions and requires risk versus return analysis. Therefore, a fiduciary's performance is measured on the performance of the entire portfolio, rather than individual investments. Adoption. As of May 2004, the "Uniform Prudent Investor Act" has been adopted in  44 States and the District of Columbia. Other states may have adopted parts of the Act, but not the entire Act. According to the National Conference of Commissioners on Uniform State Laws, the most common portion of the Act excluded by states concerns the delegation of investment decisions to qualified and supervised agents. Comparison to Prudent Man Rule. "The Uniform Prudent Investor Act" differs from the Prudent Man Rule in four major ways: Not adopted by.... As of 2021 the states which have not adopted the "Uniform Prudent Investor Act" or Substantially Similar include: Suitability. In enacting the "Uniform Prudent  Investor Act", states should have repealed legal list statutes, which specified permissible investments types. (However, guardianship and conservatorship accounts generally remain limited by specific state law.) In those states which adopted part or all of the Uniform Prudent Investor Act, investments must be chosen based on their suitability for each account's beneficiaries or, as appropriate, the customer. Although specific criteria for determining "suitability" do not exist, it is generally acknowledged, that the following items should be considered as they pertain to account beneficiaries: