What is a Fiduciary?

What is a Fiduciary?

April 10, 2024

A fiduciary is a person or organization that acts on behalf of others and is legally and ethically bound to put their clients’ interests ahead of their own. Here are some key points:

  1. Legal Responsibility: Fiduciaries are required to act in the best interest of their clients. This duty extends to preserving good faith and trust.

  2. Prudent Person Standard: Fiduciaries must adhere to a “prudent person standard of care.” This means acting with the needs of beneficiaries in mind, avoiding conflicts of interest, and ensuring no profit is made without explicit consent.

  3. Examples: Fiduciaries include money managers, financial advisors, lawyers, trustees, and corporate officers.

NAPFA and Fiduciary Duty

The National Association of Personal Financial Advisors (NAPFA) is a professional association of Fee-Only financial advisors. As a member of NAPFA, Sierra Pacific Financial Advisors is committed to working in the best interests of our clients. Here’s what you need to know:

  • NAPFA Members: All NAPFA members are fiduciaries. They put their clients’ interests first, aligning solely with their clients’ needs and goals.

  • Fiduciary Oath: NAPFA members take a fiduciary oath, promising to act in good faith, disclose conflicts of interest, and avoid referral fees based on financial product sales.

In summary, a fiduciary’s duty is to prioritize clients’ well-being, and NAPFA members exemplify this commitment. 

For more information, visit the NAPFA website.