| Prudent
Person Rule |
 |
A legal maximum that restricts discretion in a client's account to
investments only in those securities that a reasonably prudent person
seeking reasonable income and preservation of capital might buy for
his or her own investment.
|
 |
A
rule to protect investors who use the services of an investment advisor
from shady, risky, or otherwise poor investments such as penny stocks. |
|
|
|
|
Dictionary
