Alabama Property and Casualty Practice Exam

A person who has responsibility for the financial well-being of another is a?

1. Accountant

2. Attorney in fact

3. Broker

4. Fiduciary

The correct answer is: Fiduciary

A fiduciary is someone who has a legal and ethical obligation to act in the best interests of another party. This relationship is characterized by trust, confidence, and good faith. The fiduciary is responsible for managing the financial affairs or assets of the other party, ensuring that their interests are prioritized above their own. This role can apply in various contexts, such as in relationships between guardians and wards, trustees and beneficiaries, or agents and principals. The other options refer to specific roles that may not necessarily involve the same level of responsibility and trust. An accountant, while responsible for managing financial records, does not inherently have the same fiduciary duty to their clients. An attorney in fact is someone appointed to act on another’s behalf, often in legal matters, but their role may not encompass the broad financial responsibilities characteristic of a fiduciary. A broker typically acts as an intermediary in transactions but does not have the overarching obligation to prioritize the client's interests in the same way a fiduciary does. Therefore, the term that best describes a person with responsibility for the financial well-being of another is a fiduciary.