Trusting another person or party with your financial well-being means that you are placing your stability and security in the hands of someone else. A fiduciary is a party that accepts the legal responsibility of managing the financial interests of the beneficiary. The fiduciary must act with a duty of care, good faith, loyalty and confidentiality. The fiduciary must also ensure that there is no conflict of interest that could compromise the interests of the beneficiary.
An example of the fiduciary duty is in the relationship between the investor and investment advisor. When you place your confidence in these parties, you assume that they will act in your interests and do everything possible to ensure that you are able to meet your goals. Before entering this type of relationship, you will benefit from having a clear understanding of the fiduciary owed to you and the rights of each party.
Duties owed to you by the beneficiary
The specific nature of the duties owed to you by the fiduciary depends on the specific nature of your relationship. For example, an investor will have different duties of care than those owed to clients by their attorneys. The following are examples of fiduciary duties:
- Duty of loyalty — This means that the fiduciary must act in the interests of the beneficiary at all times. They must avoid conflicts of interest and put their well-being first.
- Duty of care — The fiduciary must remain informed and knowledgeable in order to make the best possible decisions in the beneficiary’s interests.
- Duty of confidentiality — The fiduciary must be discreet, protecting the beneficiary’s sensitive or private information from others not involved in the relationship.
- Duty to disclose — The fiduciary must provide all pertinent information to the beneficiary regarding his or her finances, sensitive information and more.
If there is a breach in fiduciary duty, it is much more than an inconvenience for you. It could lead to damage to your financial interests and more. This is a serious problem, and you may benefit from seeking expert advice regarding how you can secure your interests, recoup your losses and hold the responsible parties accountable for the violation of your trust. Contact Kaufmann Gildin & Robbins LLP for a complimentary consultation.