Hedge Fund Question of the Week – Winter Edition – No. 3

What are two of the most important words to remember?

Answer:  “Fiduciary Duty”.

Yes.  An investment manager owes a fiduciary duty to its clients, and that should be a guiding principle of every firm.  

But this post is about something a bit different.  This post is about the incredible power of the words “fiduciary duty.”  

Everyone knows that a fiduciary duty is serious business, but few have an in-depth understanding of its precise meaning and application.  As a result, saying those words can stop a conversation in its tracks, reduce a room to hushed tones and even make the speaker sound like the ultimate authority.  So if you are ever in a jam, losing an argument or simply in over your head, just remember to ask this simple question: “Have we thought about our fiduciary duty?”

But also remember to use the words sparingly.  And of course, save room for a little skepticism when someone else drops the line.