what is the uniform prudent investor act upia 
the uniform prudent investor act upia is a standard that sets out guidelines for trustees to follow when investing trust assets on behalf of a trustor it also applies to financial professionals who make recommendations or place trades on behalf of clients it is an update to the former prudent man standard intended to reflect the changes that have occurred in investment practice since the late 1960s specifically the uniform prudent investor act adopts a modern portfolio theory mpt and total return approach to the exercise of fiduciary investment and discretion understanding the uniform prudent investor act upia the uniform prudent investor act was adopted in 1992 by the american law institute s third restatement of the law of trusts it was an update to the previously accepted prudent man rule 1by taking the total portfolio approach and eliminating category restrictions on different types of investments the uniform prudent investor act fostered a greater degree of diversification in investment portfolios it also made it possible for trustees to include in their portfolios investments such as derivatives commodities and futures while these investments individually have a relatively higher degree of risk they could theoretically reduce overall portfolio risk and boost returns when considered in a total portfolio context the prudent man rulethe prudent man rule was based on massachusetts common law written in 1830 and revised in 1959 it stated that a trust fiduciary was required to invest trust assets as a prudent man would invest his own assets with the following in mind 2a prudent investment will not always turn out to be a highly profitable investment in addition no one can predict with certainty what will happen with any investment decision more recently the prudent man rule has been renamed the prudent person rule this set of guidelines can also be applied outside of trustee domains where it is referred to as the prudent investor rule the uniform prudent investor act s updates to the rulethe uniform prudent investor act made four main changes to the previous prudent man rule standard 3the uniform prudent investor act s most important change was that the standard of prudence would henceforth be applied to any investment in the context of the total portfolio rather than to individual investments 