Abstract
This Article provides a sustained account of advice giving as a fiduciary activity, and it demonstrates that the dominant approach to
defining fiduciary relationships is flawed. Leading academic
commentators assert that fiduciary relationships only arise when one
party has discretion over the assets or affairs of another. Yet, many
advisors—such as lawyers, doctors, and investment professionals—lack
discretion over a principal’s assets or affairs but are nonetheless
considered fiduciaries by the courts. The dominant academic view of
fiduciary relationships is therefore incomplete because it does not
account for purely advisory relationships.
Drawing on interdisciplinary literature on trust and the normativity of
advice, the Article demonstrates that imposing a fiduciary duty on certain
advisors is not only consistent with contemporary judicial practice, but it
is also normatively correct. In addition, the Article builds a framework
for assessing which advisors should be subject to fiduciary responsibility.
Not everyone who provides advice should be subject to fiduciary liability.
Thus, the Article proposes factors to determine which advisors should be
subject to fiduciary duties.
This Article addresses a matter of widespread importance. Most
people rely on fiduciary advisors to aid with critical decision-making.
Yet, the dominant academic approach would wrongly denude these
advisors of fiduciary responsibility merely because they lack
discretionary authority over their clients’ assets or affairs. This result
would have adverse consequences for the advisory relationships on which
most people rely.
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