fiduciary

A fiduciary is a person or organization that has undertaken to act for the benefit of another party in situations requiring trust and confidence. Fiduciaries are required to place the beneficiary's interests ahead of their own and to manage assets or powers with the utmost care and loyalty. The concept arises in many fields, including trusts, estates, corporate governance, and professional services.

A fiduciary relationship is formed when one party (the fiduciary) is entrusted with power or discretion to act for or in the interest of another (the beneficiary). The fiduciary's duties include loyalty, care, obedience, confidentiality, and the avoidance of conflicts of interest. In many jurisdictions the duties are highest where the fiduciary has control over assets or significant influence over decisions.

Common fiduciaries include trustees who manage trusts, executors and administrators who settle estates, guardians who protect minors or incapable adults, agents who act on behalf of principals, corporate directors, and professionals such as lawyers and investment advisers. In securities and financial services, the fiduciary duty requires acting in the client’s best interest, including fair dealing and full disclosure of conflicts.

Breach of fiduciary duty can lead to legal remedies such as damages, disgorgement of profits, restitution, removal from the role, or equitable relief such as a constructive trust or injunction. Even where contracts or statutes govern a relationship, fiduciary duties may apply or be implied and cannot be completely disclaimed in some jurisdictions.

These duties vary by jurisdiction and by the nature of the relationship; trust law, corporate law, and securities regulation all shape the scope of duties. The term fiduciary is often used to describe a standard of care rather than a specific contract, and not all relationships with authority are fiduciary.