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| Fiduciary |
A fiduciary is a person or entity that is empowered to hold
the assets of another. A fiduciary relationship requires responsibility,
knowledge, expertise, trust, good faith and honesty. The fiduciary also has the
obligation to act in the best interests of the client and to avoid conflicts of
interest if a situation arises that has a potential benefit to the individual or
entity acting as the fiduciary.
For example, a commissioned securities broker has a fiduciary
responsibility to his or her client, and must therefore act only in the client's
best interest. If the securities broker takes into account a transaction that
will net the highest fee, as opposed to what will best suit the needs of the
client, then the broker has violated his/her fiduciary role.
