Having fiduciary duty means being in a position of trust and confidence concerning the party you are serving. Therefore, you should not act in selfish interest or in a manner likely to disadvantage the principal at any point during the fiduciary relationship. The law varies across states on who can be considered a fiduciary, but the common forms of fiduciaries include business partners, financial advisers, money managers, and insurance agents.
Fiduciaries owe various duties as detailed below.
Duty of care
A fiduciary is supposed to exercise reasonable judgment when discharging their duties. They are supposed to always act in good faith and make decisions with the best possible outcome for the principal. The standard for duty of care is based on how a reasonable person with similar knowledge and experience would react to a similar situation.
Duty to act lawfully
Even if a fiduciary is acting on behalf of the principal, they must abide by the law. It is part of a fiduciary’s duty to act in obedience to the law regarding the fiduciary relationship.
Duty of confidentiality
A fiduciary should not share nonpublic information they are privy to with a third party. Doing so will violate the principal’s right to privacy, and it may not be in their best interests if such information is made public.
Duty of loyalty
A fiduciary should have unquestionable loyalty to the principal. They should not make any decisions that may seem to be against the principal’s best interest without their knowledge and consent. Loyalty also entails honest actions that will help avoid situations that may lead to a conflict of interest.
Did your fiduciary breach their duties?
If you suffer losses from a fiduciary’s actions, then they may have breached their fiduciary duties. Therefore, it is important to be aware of the steps to take in correcting the situation.
Notably, the law provides different remedies depending on the fiduciary relationship. It is in your best interests to learn more about the options at your disposal in getting things back on track.