What are the two areas of duty for a fiduciary?

• A. Duty of loyalty and duty of prudence
• B. Duty of loyalty and duty of care
• C. Duty of prudence and duty of confidentiality
• D. Duty of care and duty of disclosure

Answer: (A)

Fiduciaries must act with loyalty and prudence. Loyalty means putting the beneficiary’s interests first, avoiding conflicts, and not profiting from the relationship at the beneficiary’s expense. Prudence means exercising careful, informed judgment—doing due diligence, considering risks, and acting with reasonable care and diligence in decisions. Together, these two duties ensure both faithful representation of the beneficiary’s interests and responsible, thoughtful decision-making. While other duties like care, confidentiality, or disclosure can be important in various settings, they do not capture the two fundamental areas that define a fiduciary’s obligations.