Registered Insurance Brokers of Ontario (RIBO) Practice Exam

A fiduciary is defined as?

1. One who manages investments for profit

2. One who holds money or property in trust

3. One who provides financial advice

4. One who sells insurance policies

The correct answer is: One who holds money or property in trust

The correct response is that a fiduciary is defined as someone who holds money or property in trust. This definition captures the essence of a fiduciary relationship, where one party (the fiduciary) is entrusted to manage the assets or interests of another party (the principal) with a high standard of care and loyalty. In such a relationship, the fiduciary has an obligation to act in the best interests of the principal, maintaining transparency and integrity. The other options do not encompass the comprehensive role of a fiduciary. For instance, while someone who manages investments for profit may have fiduciary responsibilities, this description is too narrow and doesn't apply to all fiduciaries. Additionally, while providing financial advice can be a component of a fiduciary's duties, it does not fully define the relationship or obligations that come with being a fiduciary. Similarly, selling insurance policies does not necessarily establish a fiduciary duty, as this role can exist without the need to manage or hold another party's assets in trust.