14-10907. Delegation of investment and
management functions; duties; limitations
A. A fiduciary may delegate investment and management functions that a prudent
investor of comparable skills might delegate under the circumstances.
B. A fiduciary is not responsible for the investment decisions or actions of the
investment agent to which the investment functions are delegated if the fiduciary
exercises reasonable care, skill and caution in selecting the investment agent, in
establishing the scope and specific terms of the delegation and in reviewing periodically
the investment agent's actions in order to monitor the investment agent's performance and
compliance with the scope and specific terms of the delegation.
C. The investment agent must comply with the scope and terms of the delegation and
exercise the delegated function with reasonable care, skill and caution and is liable to
the trust if the agent fails to do so. An investment agent who represents that the agent
has special investment skills must exercise those skills.
D. An investment agent who accepts the delegation of a fiduciary's function from a
fiduciary who is subject to the jurisdiction of a court of this state is deemed to have
submitted to the jurisdiction of that court even if the delegation agreement provides for
a different jurisdiction or venue.
E. A cofiduciary may delegate investment and management functions to another
cofiduciary if the delegating cofiduciary reasonably believes that the other cofiduciary
has greater investment skills than the delegating cofiduciary with respect to those
functions. The delegating cofiduciary is not responsible for the investment decisions or
actions of the other cofiduciary to which the investment function are delegated if the
delegating cofiduciary exercises reasonable care, skill and caution in establishing the
scope and specific terms of the delegation and in reviewing periodically the other
cofiduciary's actions in order to monitor the cofiduciary's performance and compliance
with the scope and specific terms of the delegation.
F. Investment in a mutual fund is not a delegation of investment function and
neither the mutual fund nor its advisor is an investment agent.
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