Question

Fiduciaries are responsible for the management of the investments in the discretionary accounts. If statutes and trust provisions permit, the fiduciary may delegate certain decisions to professional money managers. When decisions have been delegated, which of the following is the fiduciary responsible for:

a. Determining investment goals and objectives.
b. Choosing an appropriate asset allocation strategy.
c. Monitoring the activities of the overall investment program for compliance with the investment policy.
d. All of the above.

Answer 1

A fiduciary who delegates investment decisions is still responsible for determining investment goals, choosing an appropriate asset allocation strategy, and monitoring the investment program for compliance with policy, hence responsible for all of the above.

Step-by-step explanation:

When a fiduciary has delegated certain decisions to professional money managers, the fiduciary is still responsible for several key areas. These areas include:

• Determining investment goals and objectives, as the fiduciary must set the direction and purpose for the investments.
• Choosing an appropriate asset allocation strategy, because even though specific investment decisions may be delegated, the overall strategy must align with the investment goals and objectives.
• Monitoring the activities of the overall investment program for compliance with the investment policy, to ensure that the delegated actions are consistent with the set parameters and investment policy.

Therefore, when decisions have been delegated, the fiduciary is responsible for d. All of the above.