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Fiduciary relationship - Financial definition

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Concise definition of the term fiduciary relationship

A fiduciary relationship in finance is a legal obligation in which one party (the fiduciary) must act in the best interest of another party (the beneficiary). This duty involves a high standard of care and loyalty.

Comprehensive definition of the term fiduciary relationship

In the financial context, fiduciary relationships are critical in roles such as financial advisors, trustees, and corporate directors. These fiduciaries must prioritize their clients' or beneficiaries' interests above their own, ensuring transparent and ethical decision-making.
Practical examples include investment advisors managing client portfolios and trustees overseeing a trust's assets. Market practices often involve stringent regulatory standards to enforce these fiduciary duties, aimed at protecting investors and maintaining market integrity.

Additional information related to this definition

Definitions of related terms

Asset  •  Trust

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