Fiduciary duty
The obligation of a person entrusted with another's interests to act in that person's interest rather than their own — comprising, for investment advisers, a duty of care and a duty of loyalty that cannot be waived, though their application varies with the scope of the relationship.
Why it matters
Applies to the adviser and to individuals acting on its behalf. It does not apply to a software vendor, and it does not transfer to one by contract — which is the single most consequential fact for agentic finance. It bites continuously throughout the relationship, not at defined checkpoints. It is breached by acting in a conflicting interest, by failing to disclose a material conflict, or by failing to exercise the care a prudent professional would in the circumstances. Delegating a decision to an autonomous system delegates the execution and none of the duty; an adviser that cannot explain why an agent acted has not thereby moved the obligation to the agent's developer.
What it is not
These are routinely confused with Fiduciary duty. The distinctions are not pedantic — each one has consequences for how a system is governed.
Suitability asks whether a recommendation fits the client. Fiduciary duty requires acting in the client's best interest, which is a higher and continuing obligation.
Contract can allocate liability between institutions. It cannot relocate a fiduciary duty owed to a client.
Relationships
Typed edges into the rest of the ontology. These are what make the canon traversable rather than merely readable.
| Verb | Target | Meaning |
|---|---|---|
relatedTo | Duty of care | An association too weak or too general for a stronger verb. |
addresses | Accountability | The subject speaks to the object as a question or concern. |
constrains | Authority Grant | The subject bounds what the object may do. |
Record
| Canonical identifier | QIS-TERM-00054 |
| Status | Canonical industry term |
| Adoption | Widely used |
| Domain · Layer | Legal doctrine · Governance |
| Origin | Equity and trust law; in US investment management, principally the Investment Advisers Act of 1940 and the case law under it. |
| Semantic aliases | None recorded. |
| First published | 2026-08-02 |
| Last reviewed | 2026-08-02 · 180-day cycle |
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