Understanding the Different Types of Professional Fiduciaries
- The Fiduciary Institute
- Oct 6
- 5 min read
Updated: Oct 7
When most people hear the word fiduciary, they think of financial advisors or retirement plan managers. And that makes sense—those roles are among the most visible. But there’s another category of fiduciaries who play a vital, often behind-the-scenes role in people’s lives: professional fiduciaries.
If you’ve ever wondered who steps in to manage someone’s affairs when they can’t, who administers estates, or who serves as trustee, this post will help you understand the different types of professional fiduciaries—and how each serves a unique purpose.
What Is a Professional Fiduciary?
A professional fiduciary is an individual or organization legally appointed to act in the best interests of another person—known as the client, principal, or beneficiary. Unlike informal fiduciaries such as family members or friends, professional fiduciaries are trained, licensed, and often court-appointed experts who provide these services as a business.
Their work spans a range of complex situations:
Managing assets held in trust
Administering estates after someone’s death
Overseeing the finances or personal care of vulnerable adults
Serving as agent under a power of attorney
Each role carries its own set of legal duties, responsibilities, and ethical obligations.
The Fiduciary Standard: A Quick Refresher
The word fiduciary comes from the Latin fiducia, meaning “trust.” Every fiduciary—whether financial, legal, or personal—is bound by two primary duties:
Duty of Loyalty: Always act in the best interest of the person or estate served.
Duty of Care: Make decisions prudently, with diligence and competence.
While financial fiduciaries (such as investment advisors, ERISA fiduciaries, or CFPs) operate in the investment and retirement context, professional fiduciaries focus on personal and estate management. They’re guided by probate laws, state licensing requirements, and court oversight rather than securities regulation.
Both groups uphold high standards of integrity—but their scopes and responsibilities differ significantly.
Learn more about fiduciary standards and ethics → https://www.thefiduciaryinstitute.com/program-overview
The Main Types of Professional Fiduciaries
1. Trustee
A trustee manages assets held in a trust for the benefit of others according to the terms set out in the trust document.
Key responsibilities include:
Investing and managing trust assets prudently
Distributing funds or property according to trust terms
Keeping detailed records and providing accountings to beneficiaries
Avoiding conflicts of interest and self-dealing
Professional trustees are often brought in when:
A family lacks a qualified individual to serve
The trust involves complex assets (real estate, business interests, etc.)
Neutrality or expertise is required to minimize conflict
A professional trustee must balance empathy with firm adherence to fiduciary law—a blend of judgment, communication, and systems thinking.
2. Executor or Personal Representative
An executor (or personal representative) administers a deceased person’s estate through the probate process.
Their duties include:
Identifying and securing estate assets
Paying debts, taxes, and final expenses
Managing property during administration
Distributing assets to heirs or beneficiaries
Executors often work with attorneys, accountants, and appraisers to complete these tasks efficiently and in compliance with state probate codes.
A professional fiduciary serving as executor brings neutrality, organization, and procedural knowledge—especially valuable in complex or contested estates.
3. Conservator of the Estate
A conservator of the estate is appointed by the court to manage the financial affairs of an adult who is unable to do so themselves.
This role may include:
Paying bills and managing income or benefits
Overseeing investments or property
Filing taxes and maintaining insurance
Keeping detailed financial records for court review
Professional conservators often serve vulnerable adults, such as those experiencing cognitive decline, traumatic injury, or other impairments. Their work requires both business acumen and sensitivity to human need—protecting a person’s dignity while managing their resources responsibly.
4. Guardian of the Person
A guardian of the person makes decisions about a protected person’s health, safety, and living arrangements. While the conservator focuses on money, the guardian focuses on care.
Guardianship duties may include:
Coordinating housing or care services
Managing medical decisions and treatment plans
Advocating for the individual’s rights and well-being
Monitoring overall quality of life
Professional guardians often collaborate with social workers, healthcare providers, and family members. Their role demands empathy, discretion, and strict adherence to the person’s best interests.
5. Agent Under Power of Attorney
An agent (or attorney-in-fact) is appointed through a durable power of attorney (POA) to make decisions on someone’s behalf—usually related to finances or healthcare.
While many POAs name a relative or friend, professionals are increasingly called upon for this role when:
Family members are unavailable or in conflict
The individual wants a neutral, accountable decision-maker
The situation involves high complexity or risk
A professional fiduciary serving as agent must follow the specific powers granted in the POA document and act strictly within the principal’s wishes and best interests.
6. Special Fiduciary Roles
Depending on the situation, professional fiduciaries may also serve as:
Trust protector or successor trustee—stepping in if the original trustee can’t serve
Representative payee—managing government benefits for an individual
Temporary or emergency fiduciary—appointed by a court for urgent or limited purposes
These specialized assignments often require deep procedural knowledge and the ability to act quickly, impartially, and within statutory authority.
Professional Fiduciaries vs. Financial Fiduciaries
Although both groups operate under fiduciary duty, their legal frameworks and daily activities differ:
Because the term “fiduciary” is shared, it’s common for clients and even professionals to conflate the two. But their training and purpose differ—professional fiduciaries handle real-world decisions about people’s lives and legacies, not just their portfolios.
Why Professional Fiduciaries Matter
Professional fiduciaries play a crucial stabilizing role in society. They step in when family dynamics, incapacity, or complexity make it unsafe or impractical for others to serve.
Their impact includes:
Ensuring continuity of care for vulnerable adults
Protecting assets from mismanagement or exploitation
Administering estates fairly and efficiently
Reducing conflict among heirs or family members
Providing expert judgment grounded in ethics and law
In short, they safeguard both people and property—the two cornerstones of fiduciary service.
Building a Career as a Professional Fiduciary
The demand for qualified professional fiduciaries is growing nationwide. With aging populations, increased awareness of elder abuse, and the rise of blended families, courts and attorneys need reliable, ethical fiduciaries more than ever.
Many professionals enter the field from related backgrounds in:
Finance or accounting
Law or paralegal work
Social services or healthcare administration
Estate and trust management
To succeed, aspiring fiduciaries need strong judgment, business systems, and emotional intelligence—plus a clear understanding of the laws governing their appointments.
Start with our Exploring the Fiduciary Profession course, which is part of our Fiduciary Pathways™ curriculum → https://www.thefiduciaryinstitute.com/fiduciary-pathways-pilot
Best Practices for Every Professional Fiduciary
Whether you’re new to the field or managing multiple cases, these principles anchor effective practice:
Document everything. Accurate recordkeeping protects you and the client.
Maintain neutrality. Decisions must always serve the beneficiary, not family preferences.
Communicate clearly. Regular updates build trust with attorneys, courts, and families.
Stay current. Laws, reporting standards, and ethics rules evolve—so should your knowledge.
Invest in systems. A structured approach to time tracking, accounting, and case management ensures consistency and scalability. Access the Fiduciary Toolkit™ for templates and SOPs → https://www.thefiduciaryinstitute.com/fiduciary-toolkit-pilot
Ready to Grow as a Professional Fiduciary?
If you’re interested in exploring or advancing a career as a professional fiduciary, The Fiduciary Institute provides the tools, training, and community to help you thrive.
Through The Fiduciary Toolkit, self-paced courses, and certification pathways, we help fiduciaries gain the knowledge, systems, and confidence to build ethical, profitable practices.
👉 Start your fiduciary journey today. Visit The Fiduciary Institute to learn how you can build a purposeful career serving clients with integrity, independence, and skill.
