What does the duty of loyalty require from a fiduciary?

The duty of loyalty is a fundamental principle guiding fiduciary relationships, emphasizing that a fiduciary must act in the best interests of the principal they represent. Choosing the option that states a fiduciary must avoid acting adversely to the interests of the principal captures the essence of this duty. It entails that the fiduciary should not engage in actions or decisions that could harm the principal’s interests or benefit themselves at the expense of the principal.

Central to the duty of loyalty is the expectation that fiduciaries prioritize their obligations to the principal, ensuring that all acts they undertake serve to advance the principal's goals and well-being. This principle is anchored in trust and confidence, as the fiduciary should remain faithful to the commitments made while serving the principal. Thus, fulfilling this duty safeguards the integrity of the fiduciary-principal relationship and upholds the trust placed in the fiduciary.

The other options either misrepresent the fiduciary's obligations or contradict the foundational principles of fiduciary duty, which always centers on loyalty and a commitment to act in the best interest of the principal.