October 1, 1997

fiduciary

This weekend I was watching a TV lawyer show, when a lawyer on the show referred to a psychiatrist's fiduciary duties to a patient. I thought "fiduciary" was use in a monetary sense only.

Fiduciary is commonly used in a monetary or financial sense, and many people think that its use is restricted to financial discussions, but its actual meaning is broader.

The true meaning of fiduciary is 'of, based on, or in the nature of a confidence or trust'. So a person with a fiduciary responsibility to a company has an obligation to that company because the person was given control by people trusing him or her to act in the company's best interests. A fiduciary must be relied on to exercise special care, good faity, and loyalty in dealing with his or her duties.

Fiduciary is primarily a legal word, and as such it is used of relationships where money is a prime concern--a corporate director is a fiduciary of the corporation, a general partner in business has a fiduciary relationship to the other partners. But non-financial uses are perfectly appropriate, and there's nothing wrong with "a psychiatrist's fiduciary duties to a patient"--the patient trusts the doctor to act in the patient's best interests.

The word fiduciary is a seventeenth-century borrowing from Latin fiduciarius 'held in trust', ultimately derived from fidere 'to trust; have faith in'.