What better topic for the month of Valentine’s Day than that of fiduciary duty? As those once and forever smitten by the arrow of cupid can attest, love means, among other things, putting the interests of another above those of your own. This same moral ethic defines the fiduciary duty.
Of course, it wasn’t always that way. One of the key elements of trust law—from which we derive our definition of fiduciary duty— comes from two provisions of the Magna Carta. When he signed the Magna Carta in 1215, King John agreed estates would be managed only for the benefit of the beneficiaries. This eliminated both outright theft as well as the more sneaky kind of theft known as “self-dealing” transactions.
The definition of fiduciary duty has been finely tuned in the last eight centuries. Since 1940, with an acceleration beginning around 1970, one of the most important fiduciary duties—that of providing investment advice—has shifted from stodgy bank trust departments to “go-go” investment advisers registered with the Securities and Exchange Commission. The Investment Advisers Act of 1940 requires all registered investment advisers to act with the same fiduciary duty as a trustee, even though they are not named as trustees.
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Christopher Carosa
Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).
