fiduciary

  

Definition

Person or a legal entity (firm, bank, credit union) holding assets (cash, property, securities) or information as an agent-in-trust for a principal (stockholder, customer, member). A fiduciary owes (among other obligations) the duty of loyalty, full disclosure, obedience, diligence, and of accounting for all monies handed over, to the principal. A fiduciary must not exploit his or her position of trust and confidence for personal gain at the expense of the principal. Law demands a fiduciary to exercise highest degree of care and utmost good faith in maintenance and preservation of the principal's assets and rights, and imposes compensatory as well as punitive damages on the erring fiduciary.

Use fiduciary in a sentence

  • Banks, mortgage companies, and many other organizations that deal in the financial industry by holding, managing, or administrating property or money are part of the fiduciary industry and have to answer to specialized government rules.

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  • My friend and I have a fiduciary relationship, neither of us will rat out the other if one of us did something wrong.

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  • When choosing a fiduciary to handle your personal funds and loans, you want someone who is very trustworthy and has your goals in mind.

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