A.6 Fiduciary standard and application Flashcards

Acting without favoritism.

A financial professional who is legally and ethically bound to act in the best interests of their clients, adhering to fiduciary standards and principles.

Sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.

An account managed by a fiduciary, who is legally required to act in the best interest of the account’s beneficiary.

A person or entity entitled to receive benefits from a fiduciary, such as the income or principal from a trust.

A relationship of trust and confidence between two parties, where one party has an obligation to act in the best interest of the other.

An individual or organization that holds and manages assets in a trust on behalf of the beneficiaries, with fiduciary duties to act in their best interests.

A fiduciary relationship in which one party holds legal title to property for the benefit of another party.

Regulation that requires financial advisors and brokers to act in the best interests of their clients when providing retirement advice.

This requires fiduciaries to provide all relevant information to their clients, ensuring transparency and informed decision-making.

Occurs when a fiduciary fails to act in the best interest of their client, violating their duties of loyalty, care, or good faith.

Refers to the legal and ethical obligations of fiduciaries to act in the best interests of their clients or beneficiaries.

This requires financial advisors to recommend products that are suitable for the client’s financial needs and situation, but it does not require prioritizing the client’s best interest.

Mandates that fiduciaries prioritize the interests of their clients above their own in all advice and actions.

Occurs when a fiduciary’s personal interests potentially interfere with their duty to act in the best interest of their client.