Press Releases

For Immediate Release
April 19, 2004 Contact: Cheryl Weiss
(608) 264-7875

Governor Doyle Signs Uniform Prudent Investors Act

What this means for Wisconsin fiduciaries

(Madison) - Wisconsin joined 40 other states in implementing the "Uniform Prudent Investors' Act" when Governor Doyle signed Senate Bill 492 into law last week. The Uniform Prudent Investors Act was recommended by the National Conference of Commissioners on Uniform State Laws and modernizes Wisconsin's investment law. Department of Financial Institutions Secretary, Lorrie Keating Heinemann stated, "this brings much needed changes to Wisconsin's investment law and brings it in line with most other states."

The Uniform Prudent Investors Act updates much of the common law restrictions upon the investment authority of trustees of trusts and similar fiduciaries. Following are some of the changes made by Senate Bill 492 to Wisconsin investment law:

  • Allows fiduciaries to utilize modern portfolio theory to guide investment decisions;
  • Measures performance of the whole portfolio and not the performance of single investments;
  • Requires sophisticated risk-return analysis to guide investment decisions;
  • Allows fiduciaries to delegate investment decisions to qualified and supervised agents;
  • Requires fiduciaries to consider the tax consequences of their decisions;
  • Encourages trustees of endowments, foundations and trusts, to develop a written Investment Policy Statement (IPS) which clearly sets forth the parameters that investment advisors must follow when investing the trust assets; and
  • Includes clear benchmarks for measurement of a money manager's performance in the Investment Policy Statement, which allows the trustees to accurately compare performance across asset classes.