fiduciary duty

Definition

The legal obligation to act in someone else's best financial interest, putting their needs above your own. It's the difference between a financial advisor who works for you and one who's basically a commissioned salesperson.

Example Usage

The pension fund manager violated his fiduciary duty by investing in his brother-in-law's startup, however promising the returns looked on paper.

Origin

From Latin 'fiducia' meaning trust, embedded in common law for centuries

Fun Fact

Many financial advisors aren't actually fiduciaries and only must meet the lower 'suitability' standard, meaning they can sell you expensive products as long as they're not completely inappropriate.

Source: Securities law and investment advisory regulations

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