According to the loyalty and prudence standard, which action is NOT required?

The loyalty and prudence standard emphasizes the duty of an investment advisor to act in the best interest of their clients, which encompasses acting with loyalty, care, and prudence in all dealings. Among the actions listed, voting all proxies on behalf of clients is not a mandated requirement under this standard.

The key focus of the loyalty and prudence standard is to ensure clients' interests are paramount, and while proxy voting can be a part of managing client investments, it is not obligatory. Advisors have the discretion to decide how to handle proxies based on their assessment of the clients’ best interests, as well as the nature of the investment and client preferences. This means that while proxy voting can be important, it does not fall under the fundamental obligations that define loyalty and prudence in investment practices.

In contrast, providing itemized statements quarterly, utilizing client brokerage solely for the client’s benefit, and managing portfolios in the clients' best interests are all essential actions that align clearly with the duty to act loyally and prudently. These actions are designed to maintain transparency, prioritize clients' financial welfare, and ensure the advisor makes decisions that directly benefit the clients, which are central to the ethical obligations outlined by the loyalty and prudence standard.