It can be intimidating getting started with fiduciary responsibility, but it’s an important area to understand and adhere to. A fiduciary is a party who is given ample trust and confidence to manage another person’s financial assets. As a fiduciary, you are legally mandated to uphold one’s financial interests, as you are put in the position of trust and responsibility. This means that while holding such a position, you must put the best interests of the client above your own.

Understandably, working with fiduciary responsibility requires the right knowledge and skills. That’s why it’s of utmost importance to find the proper support and legal counsel—particularly in the New York area, one must exercise sound judgment to stay aware of the ever-changing local regulations. We’re here to provide you with the information you need to get started with fiduciary responsibility and offer up counsel from experienced lawyers who understand local regulations for New York residents.

What is Fiduciary Responsibility & Why Does It Matter?

As we’ve briefly mentioned, a fiduciary is someone who is trusted to act on behalf of another person—in this case, to manage their finances. In such a position, a fiduciary is expected to hold up to one set of ethical standards, as outlined by the Financial Industry Regulatory Authority (FINRA). This is in addition to any other legally required standards of accountability, which may vary depending on the specific state or governing body.

Fiduciary responsibility is important because it serves as an ethical and legal framework for how funds and assets should be managed. This helps to ensure that certain regulations and standards of care are in place to protect the interests of clients, prevent fraud, and ultimately, restore trust in determined parties responsible for managing finances. Failing to meet fiduciary standards can lead to heavy consequences, including legal issues and, in extreme cases, the complete loss of money or assets in question.

Elements of Fiduciary Responsibility

The issue of fiduciary responsibility comes down to three elements: loyalty, disclosure, and prudence. According to FINRA’s Rule 15l-1, the fiduciary and their fiduciary duty of loyalty, must at the very least, satisfy the following:

To observe high standards of commercial honor and just and equitable principles of trade;

To act with purpose of loyalty, providing only the best interests of the clients being served;

To provide utmost good faith, honesty, and full disclosure when delivering a service;

To act in such a way as to avoid misleading clients or taking advantage of clients;

To respect confidential information solely for its stated purpose and not disclose this information to third parties.

In addition, the fiduciary must make a full and complete disclosure of all relevant information in order for the party to act in the investors’ best interests. This includes any type of conflict of interest that may impact a client’s decision, as well as any commissions, markups, and discounts associated with transactions. Furthermore, prudent investing means that a fiduciary must use only sound judgment and sense of judgment for investment purposes.

It’s likely that things such as consulting costs and any potential fees are disclosed during the fiduciary period beforehand. This is all part of an investment process, so it’s important to make sure these disclosures are provided and accurate.

Legal Support in Fulfilling Fiduciary Responsibilities

For those in the New York area, it’s important to have access to experienced and knowledgeable legal counsel that understand local regulations. Trusting the wrong people with your finances can be financially devastating. That’s why it’s imperative to choose the right people for the job—with attorneys that have experience in both business and fiduciary matters.

At UpCounsel, we offer access to high quality attorneys on demand, who have an average of 14 years of experience across many industries. Our profiles of our online attorneys display client ratings and reviews of recent work, so that you can make informed decisions on who you should trust with your finances. Whether you need a one-time consult or an entire freelance legal department, our network of experienced lawyers has you covered. From small businesses to the Fortune 1000, groundbreaking companies of all sizes trust UpCounsel and its attorney community to provide high quality, cost-effective legal service and support.

Getting Started with Fiduciary Responsibility

It’s never an easy feat managing finances, particularly for larger firms or those responsible for other people’s money. Fiduciary responsibility can be a difficult and intricate process, but it’s of utmost importance that regulations are followed and standards of risk are kept in check. By understanding the elements of fiduciary responsibility, recognizing the legal support you need and taking advantage of UpCounsel’s legal services, you’ll be in a much better position to get started on a path to meeting your fiduciary obligations.


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