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fiduciary

fih-DOO-shee-er-ee /fɪˈduːʃiɛri/

nounadjectiveC1GREGMATCATUPSC

legalfinancialprofessional

Involving trust, especially with regard to the relationship between a trustee and a beneficiary; a person who holds a legal or ethical relationship of trust with one or more other parties.

A fiduciary duty is the highest standard of care imposed by law, requiring the fiduciary to act solely in the interest of the beneficiary, putting aside all personal gain.

The story behind the word. Derived from the Latin 'fiducia', meaning trust or confidence, which itself comes from 'fidus' (faithful) and 'fidere' (to trust). It is a direct cousin of 'fidelity' (faithfulness) and 'confide'. In Roman law, a 'fiduciary' contract was one based entirely on good faith.

Word relationships

trustee: A trustee is a specific type of fiduciary who manages trust property, whereas 'fiduciary' is a broad category including guardians, executors, and corporate directors.
guardian: A guardian is a fiduciary for a person's physical and financial well-being, usually a minor or incapacitated adult.

Commonly confused with

beneficiary: The fiduciary is the person who manages the assets; the beneficiary is the person who receives the benefits of those assets.

Word family

fiducial (adjective): Founded on trust or confidence.

Collocations

fiduciary duty
fiduciary responsibility
breach of fiduciary duty
act as a fiduciary

Example sentences

"The directors breached their fiduciary duty to the shareholders by approving a merger that personally enriched them at the company's expense." A court ruling on corporate misconduct.
"Always ask if your financial planner is a registered fiduciary, as they are legally obligated to recommend products that serve your best interests." Advice on choosing a financial advisor.

Memory hook

Think of 'fiduciary' as 'fid-u-share-y'. You 'confide' in them, and they manage the 'share' of money you gave them with absolute honesty. Fiduciary equals financial fidelity.

When not to use

Do not use to describe a standard arm's-length business relationship (like a buyer and seller), where neither party owes the other a special duty of loyalty.

Fun facts

Doctors, lawyers, and real estate agents all have different levels of fiduciary duties to their clients, meaning they can be sued if they put their own financial interests ahead of yours.