Question

Who is a fiduciary? Can fiduciary responsibility be shifted or delegated? Explain with examples. Why do professional services have licensing exams?

What is the difference between a fiduciary and a ‘suitable’ standard of care in professional services? What is the standard of care you are likely to get from the financial services industry in Canada?

Answer 1

1. A fiduciary is a person or an organisation entrusted with the responsibility to take care of money or other assets of its clients. That person is legally answerable to the client.

2. At common law, fiduciary bduty is not delegated. When delegating his/ her power and duties he/ she must use reasonable skills,care and caption in selecting an agent and scope and terms of obligation.

If the appointing fiduciary follows the plan' terms, exercise, prudence in the delegation process and then properly monitors the fiduciaries it appoints the named fiduciary will likely be protected from liability for any negligent acts of such delegates.

3. License is the mark of a professional. It is actually a document which shows the competency of the candidate that whether the person is able to do the certain service or not.

It is an indicator of dedication to integrating,hard work and creativity, and an assurance that the individual has passed at least a minimum screen of competence.

It is a starting point of professional growth and development and participation in professional activities is part of the ongoing activities.

4. The fiduciary standard of care requires advisors to put their clients' Interest above their own.

The suitability standard of care requires brokers to reasonably believe their recommendations are suitable in terms of their clients' financial needs, objectives and unique circumstances