Glossary

Fiduciary

A person or firm legally bound to act in someone else's best interest with loyalty and care, such as a trustee, executor or registered investment adviser.

Also called: fiduciary duty, fiduciary standard

A fiduciary is someone who holds a legal duty to act on behalf of another person and put that person's interests ahead of their own. The core obligations are loyalty (avoid or disclose conflicts and never profit at the client's expense) and care (act prudently and with reasonable skill). Trustees, executors, guardians, ERISA plan administrators and registered investment advisers are fiduciaries.

Most life insurance agents are not fiduciaries in this full sense. Producers who sell annuities must follow the best interest rules most states have adopted, and New York applies a similar standard to life insurance sales, but these rules allow commissions and stop short of a full fiduciary duty. A fee-only financial planner who is a registered investment adviser does owe a fiduciary duty when giving advice. Hypothetical example: the trustee of an irrevocable life insurance trust must manage the policy prudently for the beneficiaries; letting it lapse by ignoring premium notices could expose the trustee to liability.

When someone calls themselves a fiduciary, ask whether that duty applies to the specific product being recommended, and get it in writing. The U.S. Department of Labor's efforts to extend fiduciary rules to retirement annuity sales have been repeatedly challenged in court. See The DOL fiduciary rule and annuity sales: where it stands in 2026 and questions to ask a life insurance agent.

Last reviewed October 4, 2026

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Related terms

Best interest standard A conduct rule requiring agents and advisers to recommend products that serve the customer's needs without putting their own pay first. Suitability The requirement that an agent recommend an annuity or other product only after gathering enough information to judge that it fits the buyer. Trustee The person or institution that holds legal title to trust assets and manages them for the beneficiaries under the trust's terms and fiduciary duties. Executor The person named in a will, or appointed by a court, to settle a deceased person's estate: gather assets, pay debts and taxes, and distribute what remains. ERISA The 1974 federal law governing most private employer benefit plans, including group life insurance, which sets claim procedures and overrides many state laws.

Related guides

Best interest rules for annuity sales What the NAIC annuity best interest model (#275) requires of agents and insurers, how states adopted it, how Reg BI and New York differ, and what to ask. Annuity sales abuses targeting seniors How misleading annuity sales to older buyers work, the warning signs, what best interest rules require, and what to do if you were sold the wrong one. How to check that an insurance agent is licensed Step-by-step: verify an agent's license with the NAIC lookup, your state insurance department, NIPR and, for securities, FINRA BrokerCheck. The DOL fiduciary rule and annuity sales: where it stands in 2026 The 2024 Retirement Security Rule never took effect and was removed from the federal rulebook in 2026. What that means for annuity and rollover advice today. Employer life insurance, ERISA and beneficiary disputes How ERISA governs workplace life insurance beneficiary fights: the plan-documents rule, Egelhoff, Kennedy, claim deadlines and how to protect your form. Life insurance brokers vs agents In law an agent represents the insurer and a broker represents the buyer, but in life insurance the two roles blur. What the labels mean and what to ask.