Final answer:
An IAR is indeed a fiduciary under the Uniform Prudent Investor Act, requiring them to use skill and caution and to carefully consider the risks of investments. However, they are not necessarily required to achieve the client's objectives with the minimum risk, nor to make allocations before the contract renewal date.
Step-by-step explanation:
An Investment Adviser Representative (IAR) handling the portfolio of a senior citizen with diminished mental capacity is considered to be acting as a fiduciary. This is true and means they are bound by the provisions of the Uniform Prudent Investor Act (UPIA), which includes a set of guidelines to manage the portfolio in the best interests of the client.
- Compliance with the UPIA would not specifically require the IAR to make sure that the investment allocation is done prior to the renewal date of the contract. The act is more focused on the prudence of investment decisions, not timing concerning contract renewals. This statement is false.
- Using skill and caution in making investment recommendations is a fundamental requirement of the act, acknowledging the fiduciary duty to act in the client's best interest. Therefore, this statement is true.
- It is indeed a requirement of the UPIA that an IAR must carefully consider the risks of all investments as part of their fiduciary duty. Consequently, this statement is true.
- The act also mandates the IAR to seek to meet the client's objectives with an acceptable level of risk, but not necessarily the minimum risk, as risk should be proportional to the given investment objectives and circumstances. This statement is false due to its simplification of the term 'minimum risk'.