thumb|right|upright=1.4|The [[Court of Chancery, which governed fiduciary relations in England prior to the Judicature Acts]]

A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties (legal person or group of persons). Typically, a fiduciary prudently takes care of money or other assets for another person. One party, for example, a corporate trust company or the trust department of a bank, acts in a fiduciary capacity to another party, who, for example, has entrusted funds to the fiduciary for safekeeping or investment. Likewise, financial advisers, financial planners, and asset managers, including managers of pension plans, endowments, and other tax-exempt assets, are considered fiduciaries under applicable statutes and laws. In a fiduciary relationship, one person, in a position of vulnerability, justifiably vests confidence, good faith, reliance, and trust in another whose aid, advice, or protection is sought in some matter. In such a relation, good conscience requires the fiduciary to act at all times for the sole benefit and interest of the one who trusts.

Fiduciary duties in a financial sense exist to ensure that those who manage other people's money act in their beneficiaries' interests, rather than serving their own interests.

A fiduciary duty is the highest standard of care in equity or law. A fiduciary is expected to be extremely loyal to the person to whom he owes the duty (the "principal") such that there must be no conflict of duty between fiduciary and principal, and the fiduciary must not profit from their position as a fiduciary, unless the principal consents. The nature of fiduciary obligations differs among jurisdictions. In Australia, only proscriptive or negative fiduciary obligations are recognised, whereas in Canada, fiduciaries can come under both proscriptive (negative) and prescriptive (positive) fiduciary obligations.

In English common law, the fiduciary relation is an important concept within a part of the legal system known as equity. In the United Kingdom, the Judicature Acts merged the courts of equity (historically based in England's Court of Chancery) with the courts of common law, and as a result the concept of fiduciary duty also became applicable in common law courts.

When a fiduciary duty is imposed, equity requires a different, stricter standard of behavior than the comparable tortious duty of care in common law. The fiduciary has a duty not to be in a situation where personal interests and fiduciary duty conflict, not to be in a situation where their fiduciary duty conflicts with another fiduciary duty, and a duty not to profit from their fiduciary position without knowledge and consent. A fiduciary ideally would not have a conflict of interest. It has been said that fiduciaries must conduct themselves "at a level higher than that trodden by the crowd" and that "[t]he distinguishing or overriding duty of a fiduciary is the obligation of undivided loyalty".

In different jurisdictions

Different jurisdictions regard fiduciary duties in different lights. Canadian law, for example, has developed a more expansive view of fiduciary obligation than American law, while Australian law and British law have developed more conservative approaches than either the United States or Canada.

The question of who is a fiduciary is a "notoriously intractable" question and this was the first of many questions. In SEC v. Chenery Corporation, Frankfurter J said,

The law expressed here follows the general body of elementary fiduciary law found in most common law jurisdictions; for in-depth analysis of particular jurisdictional idiosyncrasies please consult primary authorities within the relevant jurisdiction.

This is especially true in the area of Labor and Employment law. In Canada a fiduciary has obligations to the employer even after the employment relationship is terminated, whereas in the United States the employment and fiduciary relationships terminate together.

Fiduciary duties under Delaware corporate law

The corporate law of Delaware is the most influential in the United States, as more than 50% of publicly traded companies in the United States, including 64% of the Fortune 500, have chosen to incorporate in that state. Under Delaware law, officers, directors and other control persons of corporations and other entities owe three primary fiduciary duties, (1) the duty of care, (2) the duty of loyalty and (3) the duty of good faith.

The duty of care requires control persons to act on an informed basis after due consideration of all information. The duty includes a requirement that such persons reasonably inform themselves of alternatives. In doing so, they may rely on employees and other advisers so long as they do so with a critical eye and do not unquestionably accept the information and conclusions provided to them. Under normal circumstances, their actions are accorded the protection of the business judgment rule, which presumes that control persons acted properly, provided that they act on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company.

thumb|Diagram illustrating fiduciary duty, placing good faith within duty of loyalty

Fiduciary duty in Canadian corporate law

In Canada, directors of corporations owe a fiduciary duty. A debate exists as to the nature and extent of this duty following a controversial landmark judgment from the Supreme Court of Canada in BCE Inc. v. 1976 Debentureholders. Scholarly literature has defined this as a "tripartite fiduciary duty", composed of (1) an overarching duty to the corporation, which contains two component duties—(2) a duty to protect shareholder interests from harm, and (3) a procedural duty of "fair treatment" for relevant stakeholder interests. This tripartite structure encapsulates the duty of directors to act in the "best interests of the corporation, viewed as a good corporate citizen".

  • Conservators and legal guardians/wards;
  • Agents, attorney in fact usually from written grant of authority by principal, brokers and factors/principals;
  • Buyer agent (real estate broker)/buyer client;
  • Confidential advisor including financial adviser and investment advisor/advisee or client;
  • Lawyer/client (a solicitor is presumed to have a fiduciary duty);
  • Executors and administrators/legatees and heirs;
  • Corporate partners, joint venturers, directors and officers/company and stockholders;
  • Board of directors / legal persons, including companies;
  • Partner/partner;
  • Senior employee/company;
  • Retirement plan administrators (including 401(k) plans)/retirees and workers;
  • Retirement account advisors;
  • Promoters/company and related subscribers;
  • Liquidator/company;
  • Mutual savings banks and investment corporations/their depositors and investors;
  • Receivers, trustees in bankruptcy and assignees in insolvency/creditors;
  • Governments / indigenous peoples (see e.g. Seminole Nation v. United States);
  • Doctor/patient—in Canada, not in Australia;
  • Guardian/ward;
  • Teacher/student;
  • Priest/parishioner seeking counseling.

In Australia, the categories of fiduciary relationships are not closed. Such contracts were used in the emancipation of children, in connection with testamentary gifts and in pledges. Under Roman law a woman could arrange a fictitious sale called a fiduciary coemption in order to change her guardian or gain legal capacity to make a will.

In Roman Dutch law, a fiduciary heir may receive property subject to passing it to another on fulfilment of certain conditions; the gift is called a . The fiduciary of a is a fideicommissioner and one that receives property from a fiduciary heir is a fideicommissary heir.

Fiduciary principles may be applied in a variety of legal contexts.

Possible relationships

Joint ventures, as opposed to business partnerships, If a joint venture is conducted at commercial arm's length and both parties are on an equal footing then the courts will be reluctant to find a fiduciary duty, but if the joint venture is carried out more in the manner of a partnership then fiduciary relationships can and often will arise.

Australian courts also do not recognise parents and their children to be in fiduciary relationships. In contrast, the Supreme Court of Canada allowed a child to sue her father for damages for breach of his fiduciary duties, opening the door in Canada for allowing fiduciary obligations between parent and child to be recognised.

Australian courts have also not accepted doctor-patient relationships as fiduciary in nature. In Breen v Williams,

Generally, the employment relationship is not regarded as fiduciary, but may be so if