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The fiduciary duty
Thursday, May 25, 2023

The fiduciary duty of a registered investment adviser (RIA) refers to the legal and ethical obligation we have as professionals to act in the best interest of our clients. Under the Investment Advisers Act of 1940 in the United States, registered investment advisers are responsible for putting the interests of their clients above their own and for acting with utmost good faith, diligence, and loyalty.

The fiduciary duty implies that registered investment advisers must make investment decisions and provide financial advice based on objective analysis and careful evaluation of each client's individual needs. They must avoid conflicts of interest and disclose any potential conflicts that may arise. If a conflict of interest exists, the adviser must disclose it to the client and obtain their informed consent.

Furthermore, the fiduciary duty implies that registered investment advisers must provide their clients with accurate and complete information about the services they offer, the commissions and fees they charge, the risks associated with recommended investments, and any other relevant information that may affect the client's investment decision-making.

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