I've been enjoying Chaos Monkeys: Inside the Silicon Valley Money Machine by Antonio Garcia Martinez.
It includes a memorable paragraph relating to fiduciary duties:
"Funny, that word, 'fiduciary'. From the Latin fiduciarius, meaning 'binding faith'. Legally, it refers to a condition of one party acting on behalf of another, with complete agency and assumed trust. In practice, whenever CEOs say it is their 'fiduciary duty' to do something, it means they are granting themselves moral licence to screw someone."
The terms "fiduciary" and "fiduciary duty" have been appearing fairly regularly in the financial advice space all over the world. This reflects a desire for the profession to be seen as a Profession with a capital P.
I'm not sure, however, whether the term is always well understood. You aren't a fiduciary because you call yourself a fiduciary. Whether you are a fiduciary or in a fiduciary-like relationship is a question of legal fact, that stems from the nature of your relationship with the client, the representations you've made to the client, and nature of the trust given to you by the client.
Acting as a fiduciary is not just about not working against a client's interest, but involves working in a client's interests, over and above the interests of anyone else, including yourself.
The paragraph above puts a funny slant on it, but there is an unsettling truth at the heart of it. One of the best ways of knowing if you're in a fiduciary relationship is if it creates situations that lead to truly difficult or unusual moral or ethical dilemmas.
Like the lawyer defending a criminal client who knows she is guilty, a true financial adviser acting in a fiduciary relationship will at times find themselves in sticky ethical situations. Sometimes these can be inconvenient for the adviser. More than that, it can sometimes be costly, and require the adviser to act against their own personal interests. That's the nature of a fiduciary role.