Describing a role, relationship, or action that does not involve the legally mandated duty to act solely in the best interests of another party, such as a client or beneficiary. It signifies a lack of the strict obligations of trust and loyalty imposed on fiduciaries. non-fiduciary relationships often involve parties with potentially conflicting interests, where each individual prioritizes their own benefit, within the bounds of law and ethical considerations.
Non-fiduciary meaning with examples
- The real estate agent, in a non-fiduciary capacity, presented properties to the buyer. While providing information, they were not obligated to prioritize the buyer's financial well-being above all other considerations, allowing them to potentially advocate for the seller. The agency agreement outlines the terms and conditions.
- A car salesperson operates in a non-fiduciary role. Their primary goal is to sell vehicles, even if the customer might be financially stretched. The salesperson may offer advice, but this is not considered financial counsel that prioritizes the client's needs over the dealership's profit.
- A product vendor on a website operates in a non-fiduciary capacity. Their purpose is to advertise and sell the product. While they may have a return policy, they don't necessarily provide advice about a customer's product choices. The company doesn't need to make sure customers are able to afford the product.
- The relationship between a bank and a borrower is generally non-fiduciary for certain products such as a mortgage. The bank is providing a loan and is expected to follow the law but is not beholden to the clients best interest while the borrower is. They will make profit from the transaction.
- A friend providing advice about a personal matter typically operates in a non-fiduciary role. Their counsel, while possibly helpful, does not carry the same legal weight or obligations of a fiduciary who has an ongoing obligation to serve in the best interest of the client. Each person must provide their own consideration for the situation.