Fiduciary

Investing & Markets
The Wealthspire Team
By The Wealthspire Team
July 23, 2021 · 2 min read

Fiduciary Definition

A fiduciary is a person (or entity) who acts on behalf of another party and who must put that party’s interests ahead of their own. Typically, people who make financial, medical, or legal decisions on another’s behalf are fiduciaries.

What is Fiduciary Duty?

For fiduciaries, their “duty of care” refers to an obligation to avoid being deceptive or misleading to clients and entails careful thought and critical review of all information before making decisions on their behalf. This includes complete disclosure of any and all facts or information that investors would consider to be important or could affect decision-making.

When working with a fiduciary, you are owed a “duty of undivided loyalty” from that fiduciary, meaning that in no circumstances should one engage in an activity that would conflict with the best interest of the client. Fiduciaries must continually act in a way that upholds their duties and obligations to clients and should never have undisclosed conflicts of interest. Furthermore, if a fiduciary violates this loyalty by engaging in a conflict of interest or failing to disclose something that could impact their ability to be impartial, it must be immediately disclosed or else it could be considered “fraud”.

The Role of a Fiduciary in Your Estate

Trust and estate arrangements involve both a trustee and a beneficiary. The individual named as the trust, or the estate trustee, is the fiduciary. The fiduciary has legal ownership, and can handle all of the property or assets held in the name of the trust. The trustee must make decisions that are in the best interest of the beneficiaries. This highlights the importance of creating a comprehensive estate plan, and close attention should be paid when determining who is designated as trustee.
The Wealthspire Team
The Wealthspire Team

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