You have a duty of loyalty to clients and must act with reasonable care and prudent judgment, act for their benefit and place clients' interests before your employer's or your own.

This standard relates principally to members who have discretionary authority over the management of client's assets.

Fiduciary duty is the obligations of loyalty and care in regard to the responsibility of managing someone else's assets. A fiduciary duty is a position of trust.

• A fiduciary is someone with the duty of acting for the benefit of another party.
• Loyalty is owed to clients and prospects.
• Clients' interests come before yours.
• A heightened level of fiduciary duty arises if the fiduciary has "custody" or effective control of the client's assets.
• Governing documents (e.g., trust documents and investment management agreements) are primary determinants of a fiduciary's powers and duties.

Fiduciary standards apply to a large number of persons in varying capacities, but exact duties may differ depending on the relationship with the client or the type of account under which the assets are managed.

The first step in fulfilling a fiduciary duty is to determine what the responsibility is and the identity of the "client" to whom the fiduciary duty is owed.

• When managing personal assets of an individual, the investment manager owes loyalty to that individual (i.e., the client).
• When managing the portfolios of a pension plan or trust, the investment manager owes loyalty to beneficiaries of the plan or trust (i.e., the "client"), not the person who hires the manager.

A fiduciary must make investment decisions in the context of the portfolio as a whole rather than by individual investments within the portfolio. The fiduciary should thoroughly consider the risk of loss, potential gains, diversification, liquidity and returns.