What does the term fiduciary duty specifically entail?

Fiduciary duty refers to the responsibility that an agent has to act in the best interests of their principal. This encompasses a range of ethical and legal obligations, including loyalty, confidentiality, and full disclosure of relevant information. When an agent prioritizes the client's interests, they are fulfilling their fiduciary duty, which is foundational in establishing trust in the agency relationship. This duty requires the agent to avoid conflicts of interest, place the principal's needs above their own, and maintain the highest standards of honesty and integrity.

In contrast, while legal obligations in transactions, personal relationships between clients and agents, and the necessity for written agreements can be relevant aspects of an agency relationship, they do not define the essence of fiduciary duty. The core purpose of fiduciary duty is the commitment to act in the best interests of the principal, making the responsibility to prioritize client interests the most accurate representation of the term.