What Is an Approved List?

An approved list is a roster of pre-v🐎etted investments that a broker may𒊎 recommend to clients, or that a mutual fund manager may buy for a fund.

Approved lists are sometimes called legal lists. They are intended to restrict purchases to companies that are stable and unlikely to default and in general to be a list of investments that are most suitable to an investor based on the investor's 澳洲幸运5开奖号码历史查询:risk tolerance.

Understanding an Approved List

Investors often turn to 澳洲幸运5开奖号码历史查询:financial advisors or brokers to seek help with investments. Individuals that are not experienced in the financial markets typically seek out professionals who are able to help them invest their funds. The goal of aꦅn advisor or broker is to understand the investor's goals, time horizons, and risk profile before ma♒king any investment suggestions or decisions.

As a part of this process, once a broker has gotten to know a potential investor, they can recommend an approved list of potential⛄ investments.

Approved lists eme🎉rged in the 1940s as a way to protect trustors from any mishandling of iꦏnvestments by trustees. They are, in effect, a promise that the investment strategies of the trustors will not bankrupt the trustees.

Today, approved lists protect investors by ensuring a degree of safety from extreme risk.🎶 That being said, if an investor is comfortable with taking on more risk, an advisor would be able to provide them a list that has riskier investments.

For brokerages and 澳洲幸运5开奖号码历史查询:mutual funds, the approved list limits the choi꧅ces for account managers and brokers. In most cases, an investment company's list will cover a large number of options and leave plenty of room for choice and flexibility in the building and evolution of a clienꦫt’s portfolio.

Robo-Advisors Have Lists, Too

The increasing use of 澳洲幸运5开奖号码历史查询:robo-advisors makes the lists even more relevant. They serve as effective guidelines for the algorithms that are devised 🍌to serve as digital financial advisors.

Investment companies periodically publish their approved lists with buy and sell target prices, based on data collected by the company's research team. The current lists are usually made available to clients through their brokers or 澳洲幸运5开奖号码历史查询:fund managers.

While approved lists can provide a certain security buffer for investors concerned about 澳洲幸运5开奖号码历史查询:risk management, they are not 💦always effective for every investor. Investors who want a more flexible approach tailored to their own investment and risk management strategies, and want to go well outside the box,💛 may wish to investigate brokerages and funds which provide a wider range of options.

Approved Lists in the Public Sector

Approved lists are used by local and state government agencies to identify investments that are eligible for 澳洲幸运5开奖号码历史查询:pension plans, ins🎀urance policies, and other funds under their c꧑ontrol.

The requirements for inclusion vary from state to state, but in most cases, they include investments designed to protect the interests of the agency and the beneficiaries of the funds. Approved investments for government entities are gener🐭ally low risk and low return, focusing on stability and stead🅷y growth.

Individual stocks that qualify for a state-approved list are usually of high quality. In many cases, the approved list will be required to adhere to the 澳洲幸运5开奖号码历史查询:prudent person rule, which restricts a money manag🌸er to investments that a prudent person might ꧃purchase when seeking reasonable income and preservation of capital.

Other Approved Lists

𓃲Other approved lists are issued in🍸 related and unrelated contexts. For example:

• An annual approved broker/dealer list may be issued by a government entity to restrict who may be hired to handle investments for public funds.
• An approved materials list or approved product list may be issued by a government agency to define standards for government contractors.
• An approved is issued by the U.S. Justice Department to direct borrowers in financial distress to reputable nonprofit counselors to advise them if they are considering declaring bankruptcy.