What does the prudent investor rule require from a guardian managing a ward’s assets?

The prudent investor rule requires a guardian managing a ward’s assets to exercise a reasonable level of care and skill when making investment decisions. This principle emphasizes the importance of diversifying the investment portfolio, which helps to spread risk across different asset classes rather than concentrating on a single investment or a narrow range of investments.

By diversifying the portfolio, the guardian can minimize potential losses and optimize returns over time while ensuring that the investments are aligned with the ward's best interests and risk tolerance. Additionally, the guardian is expected to oversee management, which means continually evaluating the performance of investments, making adjustments as necessary, and ensuring that the portfolio remains in alignment with the ward’s financial needs and goals.

This approach highlights the necessity for guardians to take a well-considered and structured method to investment management, focusing on long-term financial health rather than personal biases or short-term gains. This is particularly important given that the guardian holds fiduciary responsibility, meaning they must act in the best interests of the ward at all times.