Fiduciary Duty refers to the legal and ethical obligation of one party to act in the best interest of another. In financial markets, this duty typically applies to professionals such as financial advisors, fund managers, directors, or trustees who manage money or assets on behalf of clients, investors, or beneficiaries. The primary principle behind fiduciary duty is trust ó the fiduciary must prioritize the clientís interests above their own.

Under Fiduciary Duty, the fiduciary must exercise care, loyalty, and good faith when making decisions. This includes avoiding conflicts of interest, disclosing relevant information transparently, and ensuring that all actions are taken to benefit the client. For example, a portfolio manager must recommend investment options that align with the investorís financial goals and risk appetite, not those that provide higher commissions or personal gain.

In corporate governance, company directors owe fiduciary duties to shareholders ó ensuring that their decisions enhance the companyís value and are free from personal bias. Similarly, in the financial advisory domain, SEBI regulations in India require registered investment advisors (RIAs) to adhere to fiduciary standards, ensuring transparency and integrity in their recommendations.

Violating a fiduciary duty can result in legal consequences, financial penalties, and reputational damage. Therefore, maintaining accountability, honesty, and client-centric conduct is central to fulfilling fiduciary responsibilities.

In summary, Fiduciary Duty ensures that professionals handling othersí assets do so with the highest standards of integrity, competence, and care. It fosters trust, protects investor interests, and upholds ethical conduct within financial systems and corporate environments.