By Arthur Laby

This Article provides a sustained account of advice giving as a fiduciary activity, and it demonstrates that the dominant approach to defining fiduciary relationships is flawed. Leading academic commentators assert that fiduciary relationships only arise when one party has discretion over the assets or affairs of another. Yet, many advisors—such as lawyers, doctors, and investment professionals—lack
discretion over a principal’s assets or affairs but are nonetheless considered fiduciaries by the courts. The dominant academic view of fiduciary relationships is therefore incomplete because it does not account for purely advisory relationships

Drawing on interdisciplinary literature on trust and the normativity of advice, the Article demonstrates that imposing a fiduciary duty on certain advisors is not only consistent with contemporary judicial practice, but it is also normatively correct. In addition, the Article builds a framework for assessing which advisors should be subject to fiduciary responsibility. Not everyone who provides advice should be subject to fiduciary liability. Thus, the Article proposes factors to determine which advisors should be subject to fiduciary duties.

This Article addresses a matter of widespread importance. Most people rely on fiduciary advisors to aid with critical decision-making. Yet, the dominant academic approach would wrongly denude these
advisors of fiduciary responsibility merely because they lack discretionary authority over their clients’ assets or affairs. This result would have adverse consequences for the advisory relationships on which most people rely.