What Is Fiduciary Responsibility?
Fiduciary responsibility, sometimes referenced as fiduciary duty, is the best term in finance, with the possible exception of fungible. So, what is fiduciary responsibility, and do you need someone with a fiduciary duty to help with your finances? Fiduciary is a fancy word for the concept of doing what is in the best interest of someone, typically a client or a trustee. Most people are shocked to find out that most financial planners, financial advisors, stock brokers, and the like do not have a fiduciary duty to their clients. In other words, the guy you have managing all of your money is not required, by law, regulation, or contract to act in your best interests. Rather, they typically have a much more easier standard called suitability. Suitability means that the investments or other recommendations they make are merely suitable for someone like you, not the best for you. So, if it isn’t wildly inappropriate for you to be investing in Apple stock, then they can recommend Apple stock, even if they feel like another investment would be better. Any attempt to ever make any of these financial professionals required to be fiduciaries is met with immediate and ravenous attack from …