The Role of a Fiduciary

Fiduciaries are essential people in the business world. However, often, the first question asked in my line of work is “What exactly is a fiduciary? “simply put, a fiduciary is a person that acts on behalf of another person or persons to manage assets. However, the role of a fiduciary is much more than that.

A fiduciary’s responsibility are both legal and ethical. A fiduciary might be responsible for general well-being, but often the task involves finances- managing the assets of another person. CFP’s and Registered Investment Advisors all have fiduciary responsibility. These professionals are required to be loyal, honest and trustworthy because they have control over money, property, or person for someone else.

What are the Specific Duties of a Fiduciary?

The fiduciary is in a position to control the money of the beneficiary, either as an advisor (an investment advisor, for example) or someone who has direct control, as in the executor named in someone’s will. When working with a fiduciary, they owe what is called a “duty of care.” This duty ensures that they are doing their absolute best possible on behalf of the beneficiary. A fiduciary may use his or her own expertise or hire experts for their advice on behalf of the beneficiary.

What a Fiduciary Cannot Do

In short, a fiduciary can not do anything that is perceived as breaking the trust of the beneficiary. A fiduciary cannot make decisions that benefit the fiduciary at the expense of the beneficiary, this would be considered a conflict of interest. A fiduciary is also not allowed to hire incompetent individuals on behalf of the beneficiary. The duty of care extends to those individuals to make sure that the hires are competent.

Contact the Trustworthy Fiduciaries and Fiduciam Today!

Fiduciam Wealth planning is an independent, fee-only, Registered Investment Adviser providing families, individual investors, and business owners with the services they need too successfully achieve or maintain wealth. Contact one of our Certified Financial Planners for a consultation today.