There once was a time when “fiduciary” meant something.
It used to mean putting the client’s best interest first. It used to mean no self-dealing transactions. It used to mean a relationship that evoked a familial bond.
The beneficiary (or client), even if they weren’t quite aware of the legal definition and obligations of fiduciary duty, knew they could turn to their fiduciary and receive the best advice, objective advice, and, most importantly, advice free of conflicts.
But that era has passed, faded into the sepia tones of happier days.
Soon, if it’s not already apparent, a “fiduciary” merely has to promise to act in the client’s best interest—whatever that might mean. Having done that, this self-proclaimed fiduciary could then proceed to behave in any manner possible.
Prohibited transactions? Not a problem. There’s an exemption for that.
Conflict-of-interest fees? Not a problem. There’s a contract that already discloses that possibility.
Using “suitable” products? Not a problem.
We don’t even know what “best interest” means anymore, at least until some arbitrator tells us (and we all know who usually wins arbitration cases).
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