Prudent-Person Rule
A legal maxim restricting the discretion in a client's account to investments that a prudent person seeking reasonable income and preservation of capital might buy for his or her own portfolio. Also called the Prudent Man Rule.

Investopedia Says:
This rule is intended to protect investors using the services of an investment advisor from shady, risky, or otherwise poor investments, such as penny stocks.

Related Terms:
Advisor
Blue Chip Stock
Broker
Fixed Income
Government Security
Penny Stock
Preservation of Capital
Treasury Bond

• Employee Retirement Income Security Act (ERISA)
• Employee Retirement Income Security Act (ERISA)
• Employee Share Ownership Trust (ESOT)
• Employee Share Ownership Trust (ESOT)
• Employee Stock Option (ESO)
• Employee Stock Option (ESO)
• Employee Stock Ownership Plan (ESOP)
• Employee Stock Ownership Plan (ESOP)
• Employee Stock Purchase Plan (ESPP)
• Employee Stock Purchase Plan (ESPP)
• Employer-Sponsored Plan
• Employment And Training Administration (ETA)
• Employment And Training Administration (ETA)
• Employment Cost Index (ECI)
• Employment Cost Index (ECI)
• Encumbered Securities
• Encumbrance
• Ending Inventory
• End Loan
• Endogenous Growth Theory
• Endorsement
• Endowment
• Endowment Loan
• Enduring Purpose
• Energy Improvement Mortgage