When considering client needs, what must fiduciaries take into account?

Fiduciaries must take into account the client's needs and total portfolio characteristics because their primary obligation is to act in the best interest of the client. This involves understanding not only the client's investment goals but also the broader context of their financial situation. Total portfolio characteristics encompass aspects such as risk tolerance, liquidity needs, time horizon, and overall asset allocation. By evaluating these factors, fiduciaries can develop a tailored investment strategy that aligns with the client's unique circumstances and objectives.

Taking a holistic view ensures that the strategies employed are suitable and sustainable for the client's financial goals over the long term. For instance, if a client has a low risk tolerance, the fiduciary would need to balance the portfolio with more conservative investments, even if there are potential high returns in the market. Therefore, considering both client needs and total portfolio characteristics is essential for effective fiduciary duty and appropriate portfolio management.