What is described as the cardinal principle for all trust and fiduciary relationships?

The cardinal principle for all trust and fiduciary relationships is fidelity. This principle encapsulates the obligation of a fiduciary to act in the best interest of the party to whom they owe a duty, often referred to as the beneficiary. Fidelity requires the fiduciary to prioritize the interests of the beneficiary over their own and to avoid any conflicts of interest, ensuring that the trust is managed with the utmost loyalty and care.

In the context of Unit Investment Trust Funds (UITFs), fidelity not only encompasses the responsible handling of investments but also requires complete adherence to the terms of the trust agreement and relevant regulations. It establishes the essential foundation upon which the relationship between the fiduciary and beneficiary is built, promoting trust and confidence in the management of assets.

While other principles such as transparency, integrity, and responsibility are significant in fiduciary contexts, fidelity is the cornerstone that mandates the fiduciary to maintain loyalty to their duty. This distinguishes it as the most fundamental principle among the various responsibilities a fiduciary holds.