Define the Term ‘Fiduciary Duty’ in the Context of Financial Intermediaries

A fiduciary duty is a legal obligation for one party (the fiduciary, like a broker or investment advisor) to act in the best interest of another party (the client). In finance, this duty requires the fiduciary to prioritize the client's interests over their own, including ensuring the best possible trade execution.

The violation of this duty, such as through front-running a client's order, is a severe breach of trust and a major legal offense in traditional markets.