One of the discussions that comes up most often in the investment industry is fiduciary duty, yet it rarely receives more than a surface‑level examination. I’ve had this conversation many times with advisers and portfolio managers, and what has consistently stood out is how differently the concept is interpreted and how easily its deeper meaning can be blurred.

At its core, a fiduciary is someone entrusted with something that is not their own. In portfolio management, trust is placed in overseeing capital that took years of hard work to accumulate and is meant to support future security and peace of mind. The responsibility that follows is clear in principle: act in clients’ best interest, place their needs ahead of your own, avoid conflicts and exercise care, diligence and loyalty in every decision.

Most discretionary portfolio managers understand this definition intellectually. Fiduciary duty is built into regulation, reinforced through compliance and referenced frequently in marketing materials. Yet in practice, it is often treated as if it lives primarily in portfolio construction, documented process and disclosure. Those elements are certainly very important, but they capture only part of what true stewardship demands, particularly in today’s environment, which is characterized by uncertainty and rapid change.

Stewarding capital through volatile markets requires more than sound models and disciplined frameworks; it requires the capacity to remain emotionally grounded when pressure builds. A

portfolio manager

who struggles to maintain composure during times of stress places the very trust they are meant to protect at risk, regardless of how thoughtful their strategy appears during calmer periods.

Markets themselves are not neutral forces. They reflect a constant aggregation of human behaviour, emotion and expectation, which is why they have a way of provoking reaction when uncertainty rises. Long stretches of patience are often followed by sudden tests that compress decision making and reward clarity of mind over speed. In those moments, portfolio managers are not only managing risk and capital, they are managing themselves in an environment where fear seeks a response.

This challenge is rooted deeply in human biology. Research outside of finance has shown that people are highly sensitive to the emotional states of others, often in ways that bypass conscious awareness altogether. In one well‑known set of experiments, researchers collected sweat samples from two groups of individuals, one calmly exercising on a treadmill and the other preparing for a first‑time skydive. The samples were deodorized so no identifiable smell remained, and participants could not consciously tell them apart.

Their bodies, however, responded quite differently. Exposure to sweat taken from the skydivers led to elevated heart rates and heightened physiological responses associated with fear and vigilance, while the treadmill samples produced no such effect. Stress was communicated chemically, without words, expressions or conscious detection, and behaviour shifted before the mind had time to interpret what was happening.

Financial markets operate in much the same way. Fear rarely arrives with an announcement. It emerges quietly through tone, pacing, defensiveness and urgency, shaping behaviour beneath the surface before it is fully understood. When it appears, effective portfolio stewardship depends on having both the discipline and the emotional regulation required to manage that response on behalf of the wealth entrusted to them.

This is why emotional self‑regulation belongs at the centre of fiduciary responsibility. Managing capital for others begins with managing personal reactions. Under emotional strain, thinking narrows, time horizons shorten and behaviour drifts toward instinctive fight‑or‑flight responses, which have a way of producing poor decisions at precisely the wrong moments.

The industry offers no shortage of examples. Sound processes abandoned near market lows because pressure became overwhelming, investment teams destabilized by unaddressed fear and portfolios unable to survive market cycles.

True stewardship rests on emotional reliability alongside intelligence, experience and technical skill. When choosing someone to oversee your wealth, it is worth asking about periods when they faced genuine emotional pressure, both in life and in markets, and how they navigated those moments. Understanding how a portfolio manager regulates their behaviour offers insight into how steady they are likely to be when conditions become difficult.

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When it comes to handing over your wealth, trust becomes everything. Managing money feels straightforward during quiet periods, much like running comfortably on a treadmill. Yet markets have a way of forcing sudden, uncomfortable leaps. When that moment arrives, it helps to know that the person you are strapped to, like a skydiving instructor, understands how to stay calm, maintain perspective and guide you safely through those unexpected market corrections.

Martin Pelletier, CFA, is a senior portfolio manager at Wellington-Altus Private Counsel Inc., operating as TriVest Wealth Counsel, a private client and institutional investment firm specializing in discretionary risk-managed portfolios, investment audit/oversight and advanced tax, estate and wealth planning. The opinions expressed are not necessarily those of Wellington-Altus.

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