Fiduciary -- A complete definition

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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.

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