Tag: FIDUCIARY PAPERS
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Fiduciary Papers #12: The Prudent Investor Rule’s Requirement for Tax Efficient-Investing
OVERVIEW: THE PRUDENT INVESTOR RULE The Uniform Prudent Investor Act (UPIA) (1995), adopted in some form by all 50 states, applies to the investment of private trust funds. The Prudent Investor Rule, which forms the core of the UPIA, also applies in other contexts, such as to guardians, conservators, executors of estates, trustees of charitable…
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Fiduciary Paper #10: Is Proper Tax-Efficient Portfolio Design and Management a Duty, and is it Scalable?
I have increasingly witnessed registered investment adviser (RIA) firms, as well as brokerage firms, generally disavow (often in their client services agreement) any duty to manage the investment portfolios of their clients tax-efficiently, often through a blanket statement that βtax advice is not provided.β This post seeks to ask, and generally answer, two questions: First,…
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Fiduciary Papers #9: 401(k), Non-Governmental 403(b) Plan Sponsors: Risks from Class Action Claims for Unreasonable Fees
THE IMPACT OF HUGHES V. NORTHWESTERN In early 2022, the U.S. Supreme Court considered a class action lawsuit that was brought against Northwestern University’s retirement plan, which was subject to ERISA’s requirements. The U.S. Supreme Court’s decision addressed the threshold for plaintiffs to get past the “Motion to Dismiss” stage of such litigation when the…
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Fiduciary Papers #8: Brokers’ and Investment Advisers’ Duty of Due Care, and Due Diligence in Particular, Receives Renewed Emphasis from SEC Staff
In the design and management of investment portfolios, both brokers (under Reg BI) and investment advisors (as fiduciaries) possess a duty of due care. This includes undertaking sufficient due diligence as to both investment strategies, as well as in the investment product selection process. As discussed below, in April 2023 the Staff of the U.S.…
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Fiduciary Papers #6: Should Most Conflicts of Interest in Financial Services Be Avoided Under the “Best Interests” Fiduciary Standard of Conduct?
If a fiduciary investment adviser or financial planner will possess a conflict of interest with a client, must the investment adviser seek to avoid the conflict of interest? When it comes to the receipt of compensation from investment and insurance product manufacturers, the answer is often (if not nearly always) “Yes!” While Not All Conflicts…