States enact prudent investor regulations.New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of State has become the sixteenth state to pass a prudent investor law scrutinizing fiduciary performance. New York law says fiduciaries must develop and pursue an overall investment strategy for an entire trust portfolio. "Under the old law, it was okay for trustees simply to preserve capital, return a decent income and invest in nonspeculative securities," says Mary B. Lehman, managing director of private advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal at Bankers Trust The Bankers Trust is a historic American banking organisation that was acquired by Deutsche Bank in 1998. It was originally set up when banks could not perform trust company services. Company, New York. "Now, any trustee, sophisticated or unsophisticated, has to plan an investment strategy and make sure that strategy is prudent. The trustee must ensure the investment is not too risky for that beneficiary--but that it takes enough risks--and that it takes account of the beneficiary's other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. and liabilities." Fiduciaries in New York now must comply with a set of standards similar to those already imposed in 15 other states that have enacted a prudent investor law: * All investments must be considered as part of an overall portfolio. * No investment is inherently prudent or imprudent im·pru·dent adj. Unwise or indiscreet; not prudent. im·pru  dent·ly adv. (certain nontraditional investment vehicles now may be considered prudent). * In most cases, trust assets must be diversified. * The possible effect of inflation must be considered part of the investment strategy. * Fiduciaries must demonstrate "investment skill" when managing trust assets or delegate investment management to another, more qualified party. "A major change in the new law," says Lehman, "is that investments must keep ahead of inflation. You can no longer invest everything in Treasury bills and be off the hook. That is not going to preserve the purchasing power Purchasing Power 1. The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you'd be able to purchase. 2. ." Lehman says accountants have to pay particular attention to these legislative changes. "Accountants should examine every trust, sitdown with beneficiaries and review the whole investment philosophy." Other states that have passed prudent investor acts are Alabama, California, Delaware, Florida, Georgia, Illinois, Iowa, Kansas, Minnesota, Montana, Nevada, South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. , Tennessee, Virginia and Washington. |
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