What is a Fiduciary?

A fiduciary is a person or organization given authority to act on behalf of another person, who is legally and ethically bound to put their client’s interest ahead of their own interest. The legal term fiduciary developed in civil law across several centuries. The exact definition of a fiduciary and their duties and authorities will vary depending on the relationship of the fiduciary to their client. However, all fiduciary relationships have the same fundamental obligations:

1. Act with Integrity. A fiduciary must carry out their duties and use their authority in good faith. At its core, a fiduciary relationship embodies the concepts of trust, confidence, and integrity. The word fiduciary and the fundamental concept of a fiduciary itself is of Roman origin; the word comes from the latin word fiducia meaning “trust, confidence, reliance.¹”
2. Diligently Manage Clients Affairs. A fiduciary will handle a client’s property or personal affairs with care and keep true and complete records. A fiduciary will keep information, funds, and other property of their client secure and only use it for authorized purposes.
3. Duties of Disclosure. A fiduciary will promptly inform their client of matters to which the client has a right to know or the client needs to know. A fiduciary will disclose any potential conflicts of interest.

The particular duties and authorities of a fiduciary will depend on the type of fiduciary relationship they have with their client. See Court-Appointed Fiduciary Services and Private Fiduciary Services below examples of the types of fiduciary services Arctos Wealth Management & Fiduciary LLC provides.