In many cases, fiduciaries are not well understood. If you’re reading this article, you might be wondering what a fiduciary is and why they matter to you and your investments. Keep reading to learn some important facts about a fiduciary.
What is a fiduciary?
A fiduciary is someone who acts on behalf of another person or organization. In the legal world, a fiduciary’s responsibilities are to always act in their client’s best interest and not do anything that would put the interests of others before those they serve.
In an investment context, fiduciaries are those who have taken an oath to act in the best interest of their business clients. They must always take into account a number of factors, including the fees and expenses associated with investments under consideration.
Some examples of fiduciaries include investment advisors or managers as well as registered representatives at brokerage firms that serve individual investors.
Why is it important?
A fiduciary has a huge responsibility because they’re held to a higher standard than the average person in the financial industry.
It’s important to know that fiduciaries can face serious legal ramifications if they do not act within the bounds of what is right for them. This means fiduciaries must always put their client’s best interest before anything else, including perks offered by certain products and services.
If fiduciaries don’t do their job correctly, their clients can sue them for damages. It is for this reason fiduciaries are typically held to such a high standard.
Fiduciaries are an integral part of our world – but many people still aren’t quite sure what the term means and what fiduciaries do. As you can see, whether you’re an individual investor or someone who’s recently begun an investment journey, you should always consider working with a fiduciary.