UNIFORM PRUDENT INVESTOR ACT Index Funds Advisors

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[Music] the prudent investor rule comes up when people claim the trustees improperly use their money maybe invested in grandma's crazy scheme or in cryptocurrencies and they lost a bunch of money trustees get sued when they're not employing what's called the prudent investor rule and they're actually the code section called the prudent investor rule in california law and it's pretty simple it says don't lose money it means don't invest in risky things not crazy startup companies or you know hair brain schemes you have a duty to like diversify assets control risk and that's why a lot of times when you're dealing with large estates we use professionals like a trust company or a bank company because they have professional fiduciaries that employ teams of financial advisors to make sure they're investing in a well-diversified portfolio because if the trustee does not invest properly even if they are of the best intentions and they might be your uncle or relative you can sue them for neglig