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Why Are Fiduciary Duties Important?

By
Real Estate Agent with Big Block Realty 858.232.8722 CA BRE# 01261476

I'm never too busy for your San Diego, CA Referrals!

For all our students of real estate , here's your perpetual question's answer:

Fiduciary duties are crucial in various professional relationships, particularly in real estate, law, finance, and corporate governance, for several reasons:

  1. Trust and Confidence: Fiduciary duties establish a foundation of trust and confidence between the fiduciary (e.g., real estate agents, lawyers, financial advisors) and the principal (e.g., clients, beneficiaries, shareholders). This trust is essential for effective and efficient professional relationships.

  2. Protection of Interests: They ensure that the fiduciary acts in the best interests of the principal, protecting the principal's interests from potential conflicts of interest or exploitation.

  3. Accountability and Transparency: Fiduciary duties impose a high standard of accountability and transparency on the fiduciary, requiring them to act with loyalty, care, and diligence. This helps prevent misconduct and promotes ethical behavior.

  4. Legal and Ethical Compliance: Adhering to fiduciary duties is a legal and ethical requirement in many professions. Breaching these duties can result in legal consequences, including lawsuits and loss of professional licenses.

  5. Enhanced Professional Reputation: Upholding fiduciary duties enhances the professional reputation of individuals and firms, fostering client satisfaction and loyalty, and attracting more business opportunities.

  6. Market Integrity: In industries like finance and real estate, fiduciary duties contribute to market integrity and stability by ensuring that professionals act in ways that maintain fairness and trust in the market.

Overall, fiduciary duties are vital for ensuring ethical conduct, protecting clients' interests, and maintaining trust in professional relationships. 

I'm never too busy for your San Diego, CA Referrals!

Cover Image by Lisa Caroselli from Pixabay

Posted by


Thomas J. Nelson
REALTOR®, CRS, RCS-D, CDPE, e-Pro, Certified Military Home Specialist, Luxury Home Specialist, Author, Keynote Speaker and  Podcast Host 

Serving Coastal San Diego from Carlsbad to Coronado, Downtown, Balboa Park Area,
La Jolla/UCSD & Mission Bay Park Areas
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Disclaimer:  Nothing in this blog article is to be construed as legal advice, tax advice, medical advice or financial advice.  For legal advice see an attorney.   For tax advice, health or financial advice see a tax attorney, certified public accountant, or other qualified professional.
Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co Notary Services retired RE Broker

Hey Thomas J. Nelson, REALTOR ® CRS,ABR,PSA,RCS-D, ePRO I don't know who inspired who but I just came from that question in the Q&A section. 😊

Aug 05, 2024 07:11 PM
Thomas J. Nelson, REALTOR ® CRS,ABR,PSA,RCS-D, ePRO

Bob "RealMan" Timm I finally decided after XXX years of being facetious with my answer to that God-awful-repetitive question to just have a ready to go good answer to it from now on. 😉😂🤣

Aug 05, 2024 07:31 PM
Michael Elliott
Fathom Realty - Burlington Township, NJ
Burlington, New Jersey Residential Sales

Thank you, TJ...I see a few reblogs in the future of this post.  Well done.  

Aug 06, 2024 01:23 AM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Hello Professor Nelson - I am looking forward to your next lesson.    You obviously have seen many questions over the years.  And repeats of those asked over and over again are not uncommon.  Such is education. . .    Each of us learns in different ways and at different times.  

Aug 06, 2024 03:19 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Nice post on the role of fiduciaries, Thomas. At the end of the day it's all about always acting in your client's interests... and never letting your own interests into the mix.

Aug 06, 2024 05:07 AM
Roy Kelley
Retired - Gaithersburg, MD

This is an excellent post to share with the new agents asking about fiduciary responsibilites.

Aug 06, 2024 06:17 AM
George Souto
George Souto NMLS #65149 - Middletown, CT
Your Connecticut Mortgage Expert

Thomas J. Nelson, REALTOR ® CRS,ABR,PSA,RCS-D, ePRO as I just commented on Michael Elliots re-blot of your blog you mailed it on this one.

Aug 06, 2024 03:31 PM
Thomas J. Nelson, REALTOR ® CRS,ABR,PSA,RCS-D, ePRO

Thank you sir!

Aug 06, 2024 04:51 PM
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

 A major requirement of a fiduciary is honesty. If you cannot be honest, you have no business being in our business...or any other business.

Aug 07, 2024 06:10 PM
Thomas J. Nelson, REALTOR ® CRS,ABR,PSA,RCS-D, ePRO

Agreed!

Aug 07, 2024 07:28 PM
Adam Feinberg
Elegran - Manhattan, NY
NYC Condo, Co-op, and Townhouse Advisor

New York State considers me a salesperson- which I feel creates a natural conflict of interest with my fiduciary duties. I consider myself an advisor which aligns perfectly with my fiduciary duties. As an advisor, I am able to demonstrate on a regular and routine basis how I look out for my clients best interest by being an educator, by presenting all options- explaining the pro's and con's of a situation, having the difficult conversations with clients- some of which are not in my best interests and so much more. 

Aug 09, 2024 07:36 PM
Thomas J. Nelson, REALTOR ® CRS,ABR,PSA,RCS-D, ePRO

Thank you for your comment Adam Feinberg and yes, I can understand your point, we need to define ourselves and our actions. I consider myself an entrepreneur in the real estate industry where I do not need to be told anything about fiduciary duties because my morality and personal code of ethics supersede what the state of CA requires of me...the document we sign is only as good as the morality of the signers.

Aug 17, 2024 07:26 AM
Lanre-"THE REAL ESTATE FARMER" Folayan
Samson Properties - Bowie, MD
I don't make promises.I deliver results.SOLD HOMES

This is one of those blogs that need to be read at least once a year whether you are a newbie or seasoned real estate agent. Thanks for sharing.

Aug 13, 2024 10:58 PM
Thomas J. Nelson, REALTOR ® CRS,ABR,PSA,RCS-D, ePRO

Thanks Lanre-"THE REAL ESTATE FARMER" Folayan - I wrote it to educate the newbies but also as a reminder to myself - although I find my personal code of ethics supersedes what CA expects of me.

Aug 17, 2024 07:28 AM
Patricia Feager, ABR,CRS,GRI,MRP
DFW FINE PROPERTIES - Flower Mound, TX
Selling Homes Changing Lives

Thomas J. Nelson, REALTOR ® CRS,ABR,PSA,RCS-D, ePRO - Excellence begins with trust. 

You outdid yourself on this post and that's because, I do believe you mean it. It has to be near and dear to your heart. 

Thanks, Mr. AR Wonderful.

Aug 16, 2024 07:17 PM
Thomas J. Nelson, REALTOR ® CRS,ABR,PSA,RCS-D, ePRO

Thank you Patricia Feager, ABR,CRS,GRI,MRP for your very kind comment! I always tell my clients as they sign my buyer/broker or listing agency ; I do not need a document to remind me how to behave or treat people, but CA requires it 😉The paper is only as good as the morality of the people signing it.

Aug 17, 2024 07:24 AM