The UK Law Commission has delivered its final report on how the law of fiduciary duties applies to investment intermediaries and an evaluation of whether the law works in the interests of the ultimate beneficiaries. The project was commissioned by the Department for Business, Innovation and Skills (BIS) and the Department for Work and Pensions (DWP) in March 2013.
The Law Commission’s initial consultation paper was published in October 2013 and received responses from 96 consultees, and it has now delivered its final report
The report’s terms of reference covered five things:
(1) Investigate how fiduciary duties currently apply to investment
intermediaries and those who provide advice and services to them.
(2) Clarify how far those who invest on behalf of others may take account of factors such as social and environmental impact and ethical standards.
(3) Consult relevant stakeholders.
(4) Evaluate whether fiduciary duties (as established in law or as applied in practice) are conducive to investment strategies in the best interests of the ultimate beneficiaries. We are asked to carry out this evaluation against a list of factors. In particular, do they reflect an appropriate understanding of beneficiaries’ best interests, are they sufficiently certain, and do they encourage long-term investment strategies?
(5) Identify areas where changes are needed.