With increasing oversight on investments through the fiduciary rule, businesses today are faced with the challenge of understanding their legal obligations when it comes to fiduciary duties. For businesses in Los Angeles, it is particularly important to partner with experienced lawyers who understand the intricate regulations associated with this financial responsibility. Though understanding where to start can seem intimidating, with the right counsel, businesses can confidently tackle the fiduciary duties in an efficient and effective manner.

What is a Fiduciary Duty?

In the United States, a fiduciary duty is a legal duty, based on trust law, where one party has a duty to carefully act on behalf of and in the best interests of another party. The fiduciary relationship is narrower than that of a trustee, which implies a broader duty, but is more extensive than an arm’s length party or an agent relationship. Common fiduciary duties include acting honorably, faithfully, and with complete loyalty to the other party, and are held in financial situations where money or property is handed over from one party to another for safekeeping.

The “Fiduciary Rule”

Though fiduciary responsibility has been at the core of financial dealings for generations, Obama’s Department of Labor put into effect the “Fiduciary Rule,” previously known as the “Conflict of Interest Rule.” This rule dictates that a financial advisors and stockbrokers must act in the best interests of the person they’re giving advice to, rather than only in their own interests or the interests of a firm. The rule is designed to protect investors from advice that is motivated more by financial gain than by ethical considerations. The rule applies to anyone with discretionary control of or who renders advice about retirement plans and tax preparation – so, in some cases, depending on the roles and responsibilities in a financial firm, many staffers may be subject to the rule.

Understanding Your Obligations

For businesses in Los Angeles, understanding fiduciary obligations can be difficult. Depending on the investment situation, fiduciary responsibility may include a variety of service standards required by both state and federal laws. Fiduciary duties can be maintained over assets from and investments from clients, from pension investments, and healthcare plans, even in cases of commercial loan investments. However, different fiduciary models require a different understanding of the law and regulations in order to properly maintain state regulations.

Partnering with Experienced Lawyers

Finding the right counsel to serve as fiduciary can be a challenge, and even when you find a lawyer, ensuring that they have the experience to handle fiduciary responsibilities can be a daunting task. However, with UpCounsel, you can find experienced lawyers who are familiar with local regulation in Los Angeles. These attorneys have impressive portfolios, with an average of 14 years of experience, what up to date ratings and reviews so you can make an informed decision as to which attorney is the right fit for your business needs.

Having counsel that understands state regulation provides invaluable peace of mind, allowing businesses to meet with confidence the myriad of duties required by fiduciary responsibility. With the right counsel, businesses can be confident they’re investing in according to regulations, protecting their investments, and providing the best financial advice possible for their clients.

Topics:

fiduciary responsibility,

fiduciary duty,

fiduciary rule