Lawsuits against trustees are on the rise.  That is the conclusion to be drawn from the following statistic, as reported in the on-line article entitled How Not to Get Sued:

[L]awsuits and arbitration cases concerning breach of fiduciary duties are increasing at a compound annual rate of 22 percent, according to an analysis of NASD figures by the Center for Fiduciary Studies, of Sewickley, Pa.

The linked-to article goes on to address key strategies for avoiding trustee lawsuits, which are encapsulated in the following 4 bullet points:

  • Know the client’s risk tolerance
  • Serve the client’s needs
  • Keep careful records
  • Be particularly careful to document anything unusual

The Society of Fiduciary Advisors has also published its BEST PRACTICES FOR INDIVIDUAL INVESTORS, which provides excellent risk-management guidance for trustee/investment advisors.