◈ GLOSSARY · PERSONAL FINANCE
Fiduciary Duty.
A definition, in plain English — with the books that teach it.
Reviewed by ClearValue Editorial Team · Jun 27, 2026
◈ DEFINITION
What it means
Definition
A legal obligation to act in the client's best interest, not just recommend something "suitable." Registered Investment Advisors (RIAs) are held to it; broker-dealers historically were not, though the SEC's Regulation Best Interest narrowed the gap. When you hire someone to manage your money, ask them in writing whether they're a fiduciary at all times — the answer changes which products they're allowed to push.
◈ IN PRACTICE
Example
A fiduciary advisor recommending a low-cost index fund with a 0.04% expense ratio over a load fund paying them a 5% commission, because the index fund is better for the client even though it pays the advisor less.