Are Banks Fiduciaries? Trust Accounts, ERISA, and Advisers

Banks are not fiduciaries in most of the ways you interact with them. Opening a checking account, taking out a mortgage, or buying a certificate of deposit creates a debtor-creditor relationship, not a fiduciary one. A bank only owes you fiduciary duties when it takes on a specific role: acting as a trustee or executor, managing retirement plan assets under ERISA, or advising you through a registered investment advisory arm. The distinction matters because a fiduciary has to put your interests first, while an ordinary bank only has to follow the account agreement you both signed.

The Default Relationship Is Debtor-Creditor

When you deposit money into a checking or savings account, the bank isn’t holding your cash in a vault with your name on it. It borrows the money and promises to pay it back on demand. Courts treat this as an arm’s-length transaction where each side looks out for its own interests. The bank has no obligation to get you the best interest rate or tell you a competitor pays more.

The bank’s duties to an ordinary depositor come from the account agreement: process transactions accurately, maintain correct balances, follow the terms both sides signed. If the bank botches a transaction, that’s a breach of contract, not a breach of fiduciary duty. The difference sounds academic until you’re in court. Fiduciary breach claims carry broader remedies and sometimes punitive damages. Contract claims usually limit you to the actual loss.

Lending works the same way. A mortgage lender or auto lender is a creditor pricing risk for profit. The Truth in Lending Act requires clear disclosure of finance charges, APRs, and other key terms so you can compare offers.¹ Those disclosures are meaningful consumer protections, but they fall well short of a fiduciary duty. The bank has to tell you the price. It does not have to make sure the price is fair.

Trust and Estate Services Are Fiduciary

The clearest case where a bank owes you fiduciary duties is when it runs a trust department. Federal law authorizes national banks to serve as trustees, executors, guardians, and in other fiduciary roles, subject to approval from the Office of the Comptroller of the Currency.² The FDIC describes a bank fiduciary’s primary duty as the management and care of property for others, not for the bank’s own profit.³

The OCC regulates these activities under detailed rules that define what counts as a fiduciary capacity, including any role where the bank holds investment discretion over someone else’s assets.⁴ “Investment discretion” means sole or shared authority to decide what to buy or sell for an account, whether or not the bank actually exercises it.

Banks acting as trustees also follow the Uniform Prudent Investor Act, which most states have adopted. The Act requires trustees to evaluate investments in the context of the entire portfolio rather than judging any single holding in isolation. Diversification is mandatory unless specific circumstances make concentration clearly prudent.⁵ The trustee must weigh beneficiaries’ needs, inflation, tax consequences, liquidity, and capital preservation. A bank that loads a trust portfolio with its own investment products while ignoring cheaper or better-performing alternatives is exactly what the standard is designed to catch.

If a bank trustee or executor mismanages assets or engages in self-dealing, a court can order it to repay all losses, surrender any profits earned from misusing trust property, and remove it from the role entirely.

Retirement Plan Management Under ERISA

Banks that manage pension or retirement plan assets face some of the strictest fiduciary rules in American law. The Employee Retirement Income Security Act requires anyone acting as a fiduciary for an employee benefit plan to act solely for the benefit of participants and their beneficiaries. The standard is demanding: the fiduciary must use the care, skill, and diligence a knowledgeable person in a similar position would use, and must diversify investments to reduce the risk of large losses.⁶

ERISA also prohibits specific transactions between a plan and parties with a financial interest in the outcome. A bank managing retirement assets cannot lend plan money to itself, sell its own products to the plan without proper exemptions, or use plan assets for its own benefit.⁷ A fiduciary who breaches these duties is personally liable to restore all plan losses and hand back any profits earned through misuse of plan assets. Courts can also remove the fiduciary.⁸

One gap is worth knowing about. The Department of Labor finalized a rule in April 2024 that would have broadened who qualifies as a fiduciary when giving retirement investment advice. That rule was vacated in early 2026 and never took effect. The older, narrower definition is back in place, and no replacement has been adopted. The fiduciary standard for one-time retirement rollover advice remains less protective than many people assume.

Bank-Affiliated Investment Advisers

Many large banks operate investment advisory divisions registered under federal securities law. When a bank employee acts through one of these registered advisory arms, the Investment Advisers Act of 1940 imposes a fiduciary duty with two parts: a duty of care and a duty of loyalty.⁹ The duty of care means the adviser must give advice that serves your interest, seek the best execution for trades, and monitor your portfolio over time. The duty of loyalty means the adviser cannot put its financial interest ahead of yours and must disclose all material conflicts.¹⁰

This is a meaningful protection, but it only applies when you’re working with the bank’s advisory arm under an advisory agreement. If the same bank employee acts as a broker-dealer representative instead, a different and weaker standard applies.

Regulation Best Interest Is Not a Fiduciary Standard

Bank-affiliated broker-dealers that recommend securities to retail customers must follow the SEC’s Regulation Best Interest. The rule requires the broker-dealer to act in your best interest at the time of the recommendation without placing its own financial interest ahead of yours. It has four components: disclosure, care, conflict-of-interest, and compliance obligations.¹¹

Reg BI applies only at the moment of recommendation. It does not create the same ongoing, relationship-wide duty the Investment Advisers Act imposes on registered advisers. This is where most confusion lives. The person sitting across the desk at your bank might owe you a fiduciary duty under the Advisers Act, a best-interest obligation under Reg BI, or neither, depending on which capacity they’re in at that moment. The SEC’s 2026 examination priorities specifically target how broker-dealers handle conflicts, recommendations involving complex or tax-advantaged products like variable annuities and structured notes, and advice to older investors saving for retirement.¹¹

When an Ordinary Banking Relationship Crosses the Line

Even outside trust departments and advisory arms, courts sometimes find that a bank has created fiduciary obligations through its conduct. The analysis is fact-intensive, and judges focus on a few factors.

Discretionary control over your assets. If a bank has authority to buy, sell, or move your money without getting your approval first, federal regulations treat that as investment discretion, which is a fiduciary capacity. The bank then has to justify that every action served your interest, not its own.⁴
Special trust and confidence. When a bank employee provides tailored financial advice that goes beyond routine product information, and the customer reasonably relies on that advice for a major decision, courts may find a fiduciary relationship formed. The bank’s sophistication relative to the customer matters, as does whether the bank held itself out as an adviser rather than a salesperson.
Customer vulnerability. A customer’s age, cognitive capacity, or lack of financial experience can weigh in the analysis. Elderly customers receive particular attention from courts and regulators.

The “special trust” analysis is where banks most often get surprised. A loan officer who starts giving a long-time customer investment advice over lunch, or a private banker who helps a client restructure their entire financial life, may have created obligations the bank never intended to accept. Courts look at what actually happened, not what the account agreement says about the relationship.

Elderly customers get an extra layer of protection. The Senior Safe Act provides banks and their employees with legal immunity for reporting suspected elder financial exploitation to federal, state, or local authorities, as long as the reporting employees have received training on identifying and reporting abuse and the report is made in good faith with reasonable care.¹² Most states have additional laws encouraging or requiring banks to flag suspicious transactions involving seniors, and some impose affirmative obligations to delay disbursements when exploitation is suspected.

How to Check What Duty Your Bank Actually Owes You

You don’t have to guess. Several tools make the answer concrete.

Ask for the Form CRS. Registered broker-dealers and investment advisers must give retail customers a relationship summary called Form CRS. It’s limited to two pages for standalone firms and four pages for firms registered as both. The document describes the services offered, fees, conflicts of interest, and the firm’s standard of conduct. The standard-of-conduct section will tell you whether the firm acts in your “best interest” as a broker-dealer, as an investment adviser, or both.¹³
Use FINRA BrokerCheck. You can look up any individual who sells securities or provides financial advice through FINRA’s BrokerCheck tool at brokercheck.finra.org or by calling (800) 289-9999. The tool shows employment history, qualifications, and any disciplinary events. For individuals registered as investment advisers with the SEC, BrokerCheck links to the SEC’s Investment Adviser Public Disclosure database.¹⁴
Contact your state securities regulator. Some advisers register at the state level rather than with the SEC or FINRA. Your state regulator can confirm registration and flag any disciplinary history.
Read your agreements. An investment advisory agreement will explicitly state that the adviser owes you a fiduciary duty. A brokerage agreement will not. If you’re unsure which relationship you have, ask directly and get the answer in writing.

One practical warning about sales conversations: a bank employee recommending products isn’t necessarily acting in your interest, even if they’re friendly and knowledgeable. If the recommendation doesn’t come through a registered advisory relationship governed by the Advisers Act or Reg BI, the bank’s primary incentive may be its own fee revenue. Ask whether the person making the recommendation is registered as a broker-dealer representative or investment adviser, and whether their compensation is tied to the product being recommended.

Where to Complain if a Fiduciary Duty Is Breached

The right complaint channel depends on which role the bank was playing when things went wrong. The OCC supervises national bank trust departments under 12 CFR Part 9. Banks must obtain OCC approval before exercising fiduciary powers, and the Comptroller can revoke those powers if the bank acts unlawfully or fails to use them for five consecutive years.² The SEC enforces the Investment Advisers Act and Regulation Best Interest.¹¹ The Department of Labor administers ERISA’s fiduciary standards for retirement plans.⁶

Trust and estate disputes go to state probate courts. ERISA violations can be reported to the DOL’s Employee Benefits Security Administration. Investment advisory and broker-dealer complaints go to the SEC or FINRA. For national banks in any capacity, you can file a complaint directly with the OCC.

1
Office of the Law Revision Counsel. 15 USC 1601 – Congressional Findings and Declaration of Purpose
2
Office of the Law Revision Counsel. 12 USC 92a – Trust Powers
3
FDIC. Trust/Fiduciary Activities
4
eCFR. 12 CFR Part 9 – Fiduciary Activities of National Banks
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Legal Information Institute. Uniform Prudent Investor Act
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Office of the Law Revision Counsel. 29 USC 1104 – Fiduciary Duties
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Office of the Law Revision Counsel. 29 USC 1106 – Prohibited Transactions
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Office of the Law Revision Counsel. 29 USC 1109 – Liability for Breach of Fiduciary Duty
9
U.S. Securities and Exchange Commission. Commission Interpretation Regarding Standard of Conduct for Investment Advisers
10
Office of the Law Revision Counsel. 15 USC 80b-6 – Prohibited Transactions by Investment Advisers
11
U.S. Securities and Exchange Commission. Fiscal Year 2026 Examination Priorities
12
Investor.gov. Senior Safe Act Fact Sheet
13
U.S. Securities and Exchange Commission. Form CRS Relationship Summary – Amendments to Form ADV
14
FINRA. Check Registration – Sellers and Investments