How Has it Evolved Over the Centuries?
Professor of Law
Boston University School of Law
“Fiduciary Duty applies when one person has responsibility for the assets or property of another person. The fiduciary must act in the best interest of the person who has entrusted those assets”– the beneficiary according to fiduciary scholar and law professor Tamar Frankel. During the 2010 Fiduciary Forum in Washington, DC, Prof. Frankel discussed the importance of advice to individual and institutional investors, and why she believes that all who provide that advice should be held to the fiduciary standard. “There is a big difference between the suitability standard and the fiduciary standard. Unfortunately, studies show that investors typically do not make this distinction.”
The Origins of Fiduciary Duty and Some Key Differences Between Brokers’ and Fiduciaries’ Duties.
Arthur B. Laby, Professor of Law
Rutgers-Camden School of Law
Professor Laby discusses the origins of fiduciary duty and the sharp differences between brokers and investment advisers duties to their clients. Professor Laby notes that fiduciaries are very different from other types of services providers, because they uniquely have a duty to “adopt the principal’s goals, objectives or ends… and promote those ends.”
The Fiduciary Standard: What is it?
Robert A. Prentice, JD
Chair-Business, Government and Society
McCombs School of Business
University of Texas at Austin
Prof. Robert Prentice said that for even savvy, well-educated investors, the perception is that brokers already do have fiduciary duty to clients. He discussed how the law can help shape the culture of a profession. He highlights the significant difference between the law requiring advisors to do what’s in the best interest of their clients and it not doing so. This requirement changes the behavior of advisors, thus changing the culture of the financial services industry..
*The presentations of professors Frankel, Laby and Prentice are from The Fiduciary Forum 2010, and courtesy of, The Committee for the Fiduciary Standard.