A standard of conduct that requires a fiduciary to discharge his duties with care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a similar character with the same aims.

Under ERISA, fiduciaries are required to carry out their duties with skill and good judgment in the use of resources.

The legal foundation for professional investment management, stated by Judge Samuel Putnam in 1830: "Those with responsibility to invest money for others should act with prudence, discretion, intelligence, and regard for the safety of capital as well as income."

ERISA fiduciary law that requires all fiduciaries to conduct the business of the plan with prudence and care. Any fiduciary violating this law is liable to the plan and its participants for all losses.

A rule originally stated in 1830 by the Supreme Judicial Court of Massachusetts in Harvard College v. Amory [ 9 Pick. (Mass.) 446 ], that, in investing, all that can be required of a trustee is that he conduct himself faithfully and exercise a sound discretion and observe how men of prudence, discretion, and intelligence manage their own affairs not in regard to speculation, but in regard to the permanent disposition of their funds considering the probable income as well as the probable safety of the capital to be invested. The current (1959) model uniform rule categorizes certain types of assets as automatically imprudent, looks at each investment separately in determining prudence, and prohibits the delegation of responsibilities. Most states have adopted the Rule as a part of state fiduciary law, usually with certain different specifics from state to state.

Under ERISA, fiduciaries are required to carry out their duties with the care, skill, and prudence that a prudent person would use in a similar situation.

An investment standard. In some states, the law requires that a fiduciary, such as a trustee, may invest the fund's money only in a list of securities designated by the state - the so-called legal list. In other states, the trustee may invest in a security if it is one that would be bought by a prudent person of discretion and intelligence, who is seeking a reasonable income and preservation of capital.(See: Legal list)

An investment standard that dictates the type of security, or specific securities, in which a fiduciary/trustee may invest money. Generally, it implies that a fiduciary/trustee may invest in a security only if it is one that a prudent man of discretion and intelligence would buy.

An investment standard. In some provinces, the law requires that a fiduciary, such as a trustee, may invest funds only in a list of securities designated by the province or the federal government. In other provinces, the trustee may invest in a security if it is one an ordinary prudent man would buy if he were investing for the benefit of other people for whom he felt morally bound to provide. Most provinces apply the two standards.

The standard to which a fiduciary is held accountable under ERISA. "Act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man, acting in a like capacity and familiar with such matters, would use in the conduct of an enterprise of a like character and with like aims."

Legal term for a fiduciary's duty to manage assets. Generally, a fiduciary must manage assets as a prudent man of discretion and intelligence would.

An investment standard used by fiduciaries as a guide for identifying acceptable investment vehicles. Some US states allow the fiduciary to invest in securities that would be bought by a prudent man of discretion and intelligence, and who looks for a reasonable income and preservation of capital. Other states require that the fiduciary only invest in a list of securities designated by the state.

The Prudent Man Rule is based on common law stemming from the 1830 Massachusetts court decision - Harvard College v. Armory, 9 Pick. (26 Mass.) 446, 461 (1830). The Prudent Man Rule directs trustees "to observe how men of prudence, discretion and intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income, as well as the probable safety of the capital to be invested".