Employing a strict legal definition of fiduciary duty when managing client assets is the first mistake a fund manager can make, senior industry figures have said.

Discussing the issue at a panel on putting investor interests first, Edward Bonham Carter, vice-chairman at Jupiter Asset Management, said fiduciary duty was not a legal concept but one of morals and principles.

Speaking at Fund Forum in Monaco, Bonham Carter said the ideology of starting with investor needs, and placing fiduciary duty as the foundation of asset management, made good commercial and moralistic sense.

“It is the case of back to the future, and starting with the customer first,” he said. “If you get that right, then everything else flows from that.

“That is what fiduciary responsibility is about. It is not a legal concept, but what makes business sense.

“Even if you were a selfish businessman, and wanted to build a business for the long term, it’s common sense starting with the customers.”

BlackRock chief executive for Europe, Middle East and Asia, David Blumer, echoed Bonham Carter’s views and said starting with the legal definition of fiduciary duty was the wrong idea.

“It has to be about core principles and values,” he said.

“It is a trust people put in us as asset managers. If you start on the legal side and putting it into contracts, we are going to lose clients again.”

The comments come as the debate over the definition continues within the UK asset management industry.

The Investment Association, formerly the Investment Management Association (IMA), has previously called for fiduciary duty to be viewed as a code of conduct, rather than binding investors to a strict legal definition.

However, critics of the IMA’s approach have said they were “suspicious” about attempts to focus the debate on a manager’s approach, rather than its legal responsibility.

The Law Commission, the UK body responsible for the definition and interpretation of legal statute, is current evaluating the meaning of fiduciary duty, and whether the concept should extend further down the investment chain.

The National Association of Pension Funds (NAPF) had also previously called on the Commission to provide guidance on the meaning of fiduciary duty, rather than an updated definition.

Bonham Carter also said evidence of the fund management industry not implementing the duty in principle form was seen in product launches.

He said managers launching products should be about what asset class would deliver in the next 10 years, and whether one had the resources to offer value and performance.