What Is Fiduciary Duty?
A legal obligation to act in the best interest of a client, placing the client's interests above the firm's or advisor's own profit. Different standards apply: registered investment advisors owe a full fiduciary duty; broker-dealers must follow suitability rules, which is a lower standard. Breaching fiduciary duty can lead to regulatory censure, restitution, and civil liability.
Fiduciary Duty across 14 exams
Fiduciary Duty appears on the following exams. Each defines it in the context candidates are tested on:
- SIE
- A legal obligation to act in the best interest of a client, placing the client's interests above the firm's or advisor's own profit. Different standards apply: registered investment advisors owe a full fiduciary duty; broker-dealers must follow suitability rules, which is a lower standard. Breaching fiduciary duty can lead to regulatory censure, restitution, and civil liability.
- Real Estate
- The legal obligation an agent owes to a client to act with loyalty, confidentiality, obedience, disclosure, accounting, and reasonable care, always placing the client's interests first.
- Series 65
- The legal obligation of an investment adviser to act in the best interest of its clients, placing client interests above its own. This includes duties of loyalty and care, such as full disclosure of conflicts of interest.
- CA Salesperson
- The legal obligation an agent owes to a client to act with the utmost good faith, loyalty, and honesty, always placing the client's interests above the agent's own. It includes duties of care, obedience, accounting, loyalty, and disclosure.
- Series 66
- A legal obligation requiring investment advisers to act in the best interest of their clients, placing client interests above their own. This is a central theme of the Series 66 exam's ethics and legal obligations content.
- TX Broker
- The legal obligation a broker owes a client to act in the client's best interest, including loyalty, confidentiality, disclosure, obedience, and accounting. These duties are a core tested concept on the national portion.
- TX Sales Agent
- The legal obligation a licensee owes a client to act with loyalty, care, disclosure, obedience, accounting, and confidentiality in the client's best interest.
- CA Broker
- The legal obligation a broker owes to a client to act with loyalty, honesty, and the client's best interests above the broker's own.
- FL Broker
- The legal obligation of loyalty, obedience, confidentiality, full disclosure, accounting, and skill that an agent owes to a principal. Broker exam questions frequently test which brokerage relationships create these duties.
- AZ Salesperson
- The set of legal obligations an agent owes a client, commonly summarized as care, obedience, loyalty, disclosure, accounting, and confidentiality (OLD CAR). Breaching these duties can expose the licensee to liability.
- IL Broker
- The legal obligation a broker owes to a client to act in the client's best interest, including loyalty, confidentiality, obedience, disclosure, accounting, and reasonable care. Breaching these duties can expose the licensee to liability.
- Series 50
- The legal obligation of a municipal advisor to act in the best interests of its municipal entity client, without regard to the financial or other interests of the municipal advisor itself. It combines a duty of loyalty and a duty of care.
- Public Adjuster
- The legal obligation of a public adjuster to act in good faith and in the best interest of the client they represent, including handling any claim funds honestly.
- Limited Lines
- The legal obligation of an agent to act honestly and in the best interest of clients and insurers, including properly handling any premiums or funds held on their behalf.