Uniform Prudent Investor Act: An Interview with Don Trone

Thompson, Duane R.
December 1996
Journal of Financial Planning;Dec1996, Vol. 9 Issue 6, p50
Academic Journal
The article presents highlights of an interview with Don Trone, one of the U.S. leading experts on the new investment standard. On answering the question that what was motivating the states to adopt the new investing standard and why was the old "Prudent Man Rule" being discarded so readily, he said that, under the old rules states found that they had painted themselves into a corner. Either through legislation or case most states had defined investment practices that were either too restrictive or prevented fiduciaries from implementing modern investment management techniques. The states also had the benefit of being able to observe for more than 20 years the success of the much more flexible fiduciary standards required of investment committees of qualified retirement plans. Trone in answer to question related to marketing opportunities said that, there was a marketing opportunity, but the planner should carefully think through the role he or she is going to play. Planners should position themselves as consultants or money managers, hut should not try to be both. A good investment process should include three independent panics: a consultant to serve as the strategic quarterback, a money manager or managers to actually pick the securities for the portfolio, and a custodian


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