Investopedia
Last Updated: May 25th, 2025
A fiduciary duty is a legal responsibility to act in someone else’s interests, without considering your own.
The adjective fiduciary implies that something is held or given in trust. An individual or entity accepts a legal commitment to act in the best interests of a beneficiary when accepting a fiduciary duty.
Many professionals accept fiduciary duties when they work for a client. Lawyers are required to act in the client’s best interests, and guardians are required to act in the interests of their wards. Fiduciaries must take strict care to ensure that no conflict of interest arises between their interests and the beneficiary’s interests.
A proven breach of fiduciary duty can result in several consequences, including legal penalties.
Key Takeaways:
- A fiduciary duty involves taking actions in the best interests of another person or entity.
- Fiduciary duty describes the relationship between an attorney and a client, or a guardian and a ward.
- Fiduciary duties include duty of care, loyalty, good faith, confidentiality, prudence, and disclosure.
- A breach of fiduciary duty occurs when a fiduciary fails to act responsibly in the best interests of a client.
