Lawyers advance the interest of their clients, financial advisors get the best investment returns for your goals and corporate executives manage public companies for the benefit of their shareholders. These are all examples of fiduciary duty, the legal and ethical obligation for professionals to act in the best interest of their clients.
In the worlds of business, investing and finance, fiduciary duty requires trustees, executives and advisors to prioritize the interests of others above their own.
What Is a Fiduciary?
A person who is bound by the requirements of fiduciary duty is known as a fiduciary, and the person who benefits from fiduciary duty is referred to as a beneficiary.
U.S. law and standards of professional conduct oblige fiduciaries to exercise a high standard of care, loyalty and honesty in providing services to their clients and stakeholders. The fiduciary is required to prioritize the interests of the beneficiary over their own.
Fiduciary duty is a serious obligation. If a fiduciary doesn’t fulfill their duties, called a breach of fiduciary duty, the beneficiary could be entitled to damages.
