Fiduciary

Key Highlights

• Fiduciary is a legal concept and term used to describe the relationship between two parties, where one party holds a fiduciary duty to act in the best interests of another.

• Key Responsibilities include putting others first, making thoughtful decisions, being honest & trustworthy, keeping information private and being transparent.

What is Fiduciary?

Fiduciary is a legal concept and term used to describe the relationship between two parties, where one party holds a fiduciary duty to act in the best interests of another. This fiduciary duty is typically held by professionals such as attorneys, accountants, investment advisors, trustees, executors, corporate officers, directors, and other corporate agents.

Key Responsibilities of a Fiduciary

• Putting Others First: Fiduciaries must always act in the best interest of the people they serve, not their own.

• Making Thoughtful Decisions: They need to carefully analyze situations and make well-informed choices to protect those they represent.

• Being Honest & Trustworthy: Fiduciaries must act within legal limits and uphold integrity in all their actions.

• Keeping Information Private: Any sensitive details about those they serve must be protected and not used for personal benefit.

• Being Transparent: If there’s a potential conflict of interest, they must openly share it to ensure fairness.

Common Fiduciary Relationships

• Trustee & Beneficiary: A trustee manages assets in a trust for someone else's benefit.

• Lawyer & Client: Lawyers must always act in their client's best interest.

• Financial Advisors & Investors: Financial advisors make investment decisions that align with their clients’ financial goals.

• Corporate Board Members & Shareholders: Board members must make decisions that benefit shareholders.

Why Fiduciary Duties Matter?

• Fiduciary responsibilities are among the highest standards of trust in law and ethics.

• They ensure professionals act fairly, avoid conflicts of interest, and protect those who rely on them.

• Violating these duties can lead to serious legal consequences, including lawsuits for malpractice or fraud.