Financial Services CRM
Fiduciary Duty
The legal obligation to act in a client's best interests, putting their needs ahead of one's own financial gain.
Complete Definition
Fiduciary Duty is the highest standard of care in financial services, requiring advisors to act solely in their client's best interests. RIAs are held to a fiduciary standard by the SEC, meaning they must disclose conflicts of interest, provide transparent fee structures, and recommend only suitable investments. This contrasts with the lower "suitability" standard applied to many broker-dealers.
Key Points
- 1Highest legal standard of care
- 2Requires full disclosure of conflicts of interest
- 3RIAs are always fiduciaries
- 4Broker-dealers may or may not be fiduciaries
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