Most adults make many decisions each day. For assistance with serious decisions involving your life, money or both, many California adults hire help from professionals or organizations. By law, these people and companies must follow fiduciary duty.
What fiduciaries do
People working as fiduciaries are legally bound to act in their customers’ best interests. A fiduciary acts on behalf of another party, making the best possible choices for these clients. Someone who needs a fiduciary must place a lot of trust in the person or organization they choose.
Common fiduciary relationships
While the term might not be familiar, you regularly interact with a fiduciary. Here’s more information about the most well-known types of fiduciaries.
Financial advisors
Financial advisors help their clients make the wisest possible investment decisions. Someone in this role controls where their clients’ money goes. Investment professionals might also sell their clients various forms of insurance.
Board members
Investors can put up or lose a lot of money investing in companies. That’s why businesses employ board members for help providing value to potential and current investors. If board members acting as fiduciaries intentionally mislead investors, it can lead to serious legal consequences for boards and the businesses they serve. One of the most infamous business-related fiduciary breaches happened with Enron in 2001.
Lawyers
Over time, the nature of personal and professional relationships can change. Whether you need a divorce or help with a business litigation matter, attorneys and lawyers are legally bound to act in the best interests of their clients.
Choosing a fiduciary is not a decision to take lightly. Making the wrong choice could endanger your health or finances. Ensure you always thoroughly research any fiduciary before enlisting their services.