Learn All About Fiduciary

Meaning of Fiduciary

fudFiduciary is a word that is derived from the Latin word fiduciaris which means “holding in trust; also from fides which means “faith” and fiducia which means trust. This goes to say that the fiduciary definition is an ethical relationship of trust and confidence that is concerned with managing property or money between at least two parties, mostly a principal and a fiduciary. The first party for instance, a corporate trust company or the bank’s trust department maintains a fiduciary relation or acts in a capacity of fiduciary to a second party like an individual who has their funds entrusted to them for purposes of investment. In the fiduciary definition, one individual who is in a vulnerable position justifiably reposes trust, reliance, god faith and confidence in a second party whose protection, advice or aid is needed in some way. In a relation like this one, good conscience dictates that one is to cat all the time in a manner that will benefit and that is in the interest of a second party and loyalty is to be maintained o those interest.

Who is a fiduciary?

According to the fiduciary definition, a fiduciary is one who has agreed to act on behalf and for of a second party in a specific way in circumstances that necessitate the growth of a relationship of confidence and trust.

The fiduciary definition is the top most standard of care at either law or equity. A fiduciary has to be completely loyal to the individual to whom he owes the obligation who is the principal and he should not at any time prioritize his interest over his obligations and he is not supposed to gain any profit from his fiduciary position unless the principal allows it.

Standard of behaviour

The moment the fiduciary definition is put in place, equity needs standard of behavior that is stricter than the tortious duty of care under the common law. It is believed that the fiduciary is obligated to not find them in a situation where his fiduciary definition duty conflicts with a second one and in one where he could profit in any way from his fiduciary obligation without the express consent or knowledge of the principal. A fiduciary definition in an ideal situation will not result in a conflict of interest. It has been stipulated that fiduciaries ought to behave in a way that is on a higher level than that of the crowd and hat their overriding or distinguishing duty is the undivided’s obligation.

Speak Your Mind