Why fiduciaries must always put your financial interests first
Fiduciaries play a key role in managing money, assets, and property for others. These professionals are legally required to put their clients’ interests first. Not all financial advisors follow this standard, but those who do must meet strict ethical and legal rules.
A fiduciary is bound by law to act in the best interest of their client, even if it means passing up a more profitable option for themselves. Their duties include a duty of care—making informed decisions based on available information—and a duty of loyalty—always prioritising the client’s needs.
Fiduciary relationships appear in many fields, including law, real estate, and finance. Attorneys, insurance brokers, and some financial advisors, such as certified financial planners and investment advisers, often operate under this standard. Executors, who handle the distribution of an estate, and trustees, who manage trust assets, also act as fiduciaries. Their responsibilities can range from giving financial advice to negotiating deals or managing investments. If a fiduciary fails in these duties—for example, by recommending an investment that benefits them more than the client—they can face legal consequences. Breaching fiduciary duties can lead to lawsuits, financial penalties, or other legal action. The rules ensure that clients receive honest and fair treatment when their money or assets are being managed.
The fiduciary role carries significant legal and ethical weight. Those who take it on must follow strict guidelines to protect their clients’ interests. Failure to do so can result in serious legal repercussions.
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