When does a duty attach — and to whom?

Educational content, not legal or compliance advice. What counts as "advice," who counts as a client, how clients are categorised, and which standard applies are all defined by local rules and vary considerably between jurisdictions and regulators.

Duties are not ambient. They attach to a relationship and a role — which means the same person can owe a fiduciary duty in one conversation and be an ordinary counterparty in the next, on the same afternoon, to the same person.

Four activities, four different duty loads

Personal advice — a recommendation to a specific person, taking their circumstances into account. This carries the heaviest duties: suitability at minimum, best interest in many regimes, plus documentation, disclosure and review.
Execution-only — the client chooses, you transact. Much lighter: no suitability duty over the choice itself, but still fair dealing, best execution, no misleading statements, and in many regimes an appropriateness check for complex products.
General information and education — explaining how an instrument works, or how a market behaves, to no one in particular. No client, no personalisation, therefore no suitability duty. This is what the Academy does, deliberately and by design.
Research, marketing and commentary — fairness, balance, disclosure of the firm's positions and conflicts, no misrepresentation.

The boundary that matters most is personalisation. Explaining what a covered call is: education. Telling this person, whose situation you know, to write one on their holding: advice — regardless of the setting, the medium, or whether anyone called it advice.

The dinner-table case

A portfolio manager is at dinner. A friend mentions a redundancy payment. The manager says: "Put it into X — that's what I'd do."

Is that advice? In many regimes personalisation is exactly what makes it so, and the informality makes things worse, not better:

No know-your-client work — no horizon, no capacity, no existing holdings, no idea whether this money is the friend's only buffer.
No record — nothing to reconstruct later, when the friend remembers the sentence differently.
No disclosure — the manager's firm may have a position, a mandate, or a relationship with X.
And the friend will treat it as a professional opinion, because it came from a professional. The status transfers even when the process does not.

The professional habit is to be explicit and to switch registers audibly: explain how the thing works, decline to size it for them, and point them at someone who can do the work properly.

Who is the client, actually?

Misidentifying the client is a classic root cause of breaches, and it is easy to get wrong because the client is often not the person in the room.

For a pension fund manager, the client is the fund and its beneficiaries — not the executive who hired you and not the sponsoring employer.
For a corporate finance adviser, the client is the company — not the CEO personally, whose interests can diverge sharply during a transaction.
For a trustee, the client is the trust's beneficiaries, including ones not yet born, whose interests may conflict with the current income beneficiary's.

In each case the duty runs to the party whose money and interests are at stake, and the loudest voice in the room is frequently not that party. Writing down "who is my client, and who merely instructs me?" at the start of an engagement resolves an astonishing share of later dilemmas.

Unit checkpoint ahead

Fiduciary duty, the suitability floor, the client picture that makes "suitable" meaningful, and where duties attach at all. Unit 4 turns to the pressure that bends all of it: money that arrives from somewhere other than the client.

Try it now

Classify three interactions you have had: a friend asking what to buy, reading a broker's research note, placing your own order online. Which duties are in play in each, and who owes them?
Rehearse the register-switch: write two sentences that explain how a product works and decline to recommend it, without sounding evasive.
For any situation where you act for others — a family pot, a club treasury, a company budget — write down who your client is, and who merely gives you instructions.