Fiduciary financial advisor in Anchorage, AK. For those in Anchorage, AK who lack the free time, knowledge, or interest to manage their investments and retirement accounts on their own, partnering with a financial advisor is a great way to help meet their financial goals. Trust is vital in that partnership, and whether you're preparing for retirement, seeking to grow your wealth, or ensuring a safe financial future for your loved ones, the knowledge, skill, and integrity of your financial advisor are of utmost importance. By working with a fiduciary financial advisor in Anchorage, AK, you'll gain a ally who is legally and ethically bound to put your own best interests first.
At Correct Capital Wealth Management, our Anchorage, AK fiduciary financial advisors will never recommend a solution, investment, or strategy that we do not truly trust in ourselves. For financial advisors that uphold the fiduciary standard and act with your best interest as their top priority, get in touch with Correct Capital today at 314-930-401(k), fill out our online form, or schedule an appointment with a member of our advisor team.
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Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.
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What Is a Fiduciary?
A fiduciary is a individual or organization that holds a position of confidence and responsibility when overseeing assets, monetary matters, or legal concerns for another person. Fiduciaries are legally and ethically bound to work in the best interests of the individual or entity they are representing, often referred to as their "principal" or "beneficiary". This duty of loyalty and duty of care is called the fiduciary standard.
Frequent examples of fiduciaries include:
- Trustees — Individuals or entities responsible for handling and overseeing assets held in a trust for the benefit of beneficiaries.
- Executors — Individuals chosen to manage the estate and assets of a deceased person as per their will or the law.
- Financial advisors — Professionals who give financial advice and manage investments for clients, with an responsibility to emphasize the client's financial goals.
- Corporate directors — Representatives of a company's board of directors who are entrusted with making decisions in the best interests of the shareholders.
- Guardians — Individuals chosen by the court to make decisions on behalf of underage individuals or persons who are not able to make decisions for themselves.
- Attorneys — Legal professionals who are obligated by a fiduciary duty to work in the best interests of their clients when dealing with their cases.
- Real estate agents — Experts who assist clients in buying, selling, or renting properties and are required to act in the best interests of their clients in real estate transactions.
Good Faith, Duty of Loyalty, and Duty of Care
There are three vital facets to understanding fiduciary duty:
1. Good Faith
Fiduciaries have an obligation to act in "good faith," which means they deal with their clients or beneficiaries truthfully, with sincerity, and without any design to mislead or harm the interests of their beneficiaries. They must consistently act honestly and with the best interests of the clients at the forefront.
2. Duty of Loyalty
Fiduciaries owe a "duty of loyalty" to the client/beneficiary, which means they must put first the beneficiary's interests ahead of their own. They ought to avoid any conflicts of interest that could compromise their capacity to act solely in the beneficiary's best interests. All conflicts of interest must be disclosed to the client or beneficiary and the advisor needs to still act with the client/beneficiary's interest above their own.
3. Duty of Care
Fiduciaries have a "duty of care" to employ the level of care, skill, and diligence that a judicious person would apply in comparable circumstances. They must make informed and careful decisions when handling assets or making decisions on behalf of their client or beneficiary. This duty ensures that they do their best to protect and increase the assets under their care while mitigating risks.
What Is a Fiduciary Financial Advisor in Anchorage, AK?
Financial advisors help Anchorage, AK individuals, families, and business owners achieve their life goals as they relate to their finances. These services include investment recommendations, retirement consulting, tax planning, estate planning, portfolio management and more.
Any individual in Anchorage, AK can give themselves the title of "financial advisor," but to say that they're a fiduciary, an advisor must be registered with the SEC, and is legally required to abide by fiduciary duty, and as a result, must put clients’ interests ahead of their own. They must possess accreditations and certifications from industry organizations such as the CFP Board and Fi360. Obtaining and keeping these certifications require continuous education and a stringent moral standard.
As an example, fiduciary financial advisors with a CERTIFIED FINANCIAL PLANNER™ certification need to follow the CFP Board's Code of Ethics and Standards of Conduct to:
- Act with honesty, integrity, competence, and diligence
- Act in the client’s best interests
- Exercise due care
- Avoid or disclose and manage conflicts of interest
- Maintain the confidentiality and protect the privacy of client information
- Act in a manner that reflects positively on the financial planning profession and CFP® certification
Are All Financial Advisors in Anchorage, AK Fiduciaries?
Not all financial advisor in Anchorage, AK are fiduciaries. The main reason is that financial advisors can work under various regulatory frameworks and compensation structures, leading to differentiated standards of care:
- Regulatory framework — Financial advisors can be subject to various regulatory frameworks depending on their business model. As an example, Registered Investment Advisors (RIAs) are typically fiduciaries. In contrast, some advisors (for example, those falling under a broker-dealer model) work under the suitability standard, which mandates strategies to be suitable for clients but does not mandate the same duties of loyalty and care.
- Compensation structure — The method financial advisors are compensated can influence their fiduciary status. Fiduciary advisors often charge a proportional charge for their services, rendering their compensation clear and limiting conflicts of interest. Non-fiduciary advisors generally receive commissions or other forms of compensation linked to product sales, which means they could make recommendations that are more in their interest than yours.
The Prudent-Person Rule
Fiduciary financial advisors are required to abide by the Prudent-Person Rule, commonly known as the prudent investor rule. The rule acknowledges that financial advisors cannot predict the future or determine which investments will be profitable with 100% certainty, but mandates that a fiduciary financial advisor select investments that a sensible person would purchase considering an acceptable risk based on the client's goals and investment objective.
The prudent person rule is an early common law principle, and was later unified with the Uniform Prudent Investor Act. Each state can apply their own unique laws. Missouri law, for example, sets out that fiduciary financial advisors must consider:
- General economic conditions
- Possible inflation or deflation
- Expected tax consequences of investments
- The role that each investment or course of action plays within your portfolio
- Expected profit and appreciation of capital
- Additional assets and resources you own
- Your needs for readily available funds, income, and preservation of capital
- An asset's special relationship or value to you, if any
- The size and nature of your portfolio, its distribution requirements, and the estimated duration of your relationship with the fiduciary financial advisor
Fiduciary Duty vs. Suitability Standard: What’s the Difference?
Advisors who operate under the “suitability rule” are merely required to recommend investment products or products that align with your goals, while financial advisors with a fiduciary duty must operate in your best interest. Here are some key differences:
Fiduciary Duty
- Ethical Obligation: Fiduciary financial advisors are lawfully and ethically bound to act in their clients' best interests at all times.
- Best Interest: Financial advisors must focus on the client's financial well-being over their own profit.
- Comprehensive Care: They must disclose all conflicts of interest, ensure transparency, and provide the highest standard of care in their advice and actions.
- Governance: Governed by the Investment Advisers Act of 1940, which requires that investment advisors have a fiduciary duty to their clients.
- ExamplesInstances: Registered Investment Advisors (RIAs) and CERTIFIED FINANCIAL PLANNER™ professionals.
Suitability Standard
- Suitability: Advisors only need to ensure that their suggestions are suitable for the client’s financial requirements and objectives at the time of the transaction.
- Lower Standard of Care: Advisors can consider their own interests as long as the recommendations are appropriate.
- Potential Conflicts: Advisors may receive commissions from the sale of investment products, which can create conflicts of interest.
- Governance: Regulated by the Financial Industry Regulatory Authority (FINRA), which mandates a “reasonable basis” that an investment is appropriate for the client.
- Examples: Some broker-dealers and insurance agents.
Best Interest vs. Reasonable Basis
The Investment Advisers Act of 1940 stipulates that fiduciary advisors must serve in their clients' "best interest," while FINRA Rule 2111 stipulates that dealer-brokers and other non-fiduciaries simply have a "reasonable basis" for their recommendations. Here's a breakdown of what those terms mean in relation to handling a client's investments and financial planning:
Best Interest | Reasonable Belief | |
---|---|---|
Definition | Mandates advisors to act in the client's best financial interest. | Requires financial advisors to suggest suitable investment products or strategies based on provided information. |
Standard of Care | Higher level of care making sure every action conforms with the client's most favorable outcome. | Ensures recommendations are appropriate and make sense for the client's situation. |
Client-Centric Approach | Financial advisors prioritize client's goals, needs, and preferences above their own. | Financial advisors base suggestions on the client's disclosed financial situation, objectives, and risk tolerance. |
Transparency | Complete disclosure of potential conflicts of interest is required. | Less stringent disclosure requirements, provided the suggestion is suitable. |
Due Diligence | Recommendations based on a comprehensive evaluation of the client's financial situation. | Suggestions based on reasonable research and analysis. |
Ongoing Duty | Continuous duty to act in the client's best interest, demanding regular reviews and updates. | Emphasizes the appropriateness of advice at the time of the recommendation, with less focus on ongoing oversight. |
Conflict of Interest | Must disclose and handle conflicts openly, ensuring clients are aware of potential biases. | Conflicts are less tightly controlled, as long as the suggestion remains suitable. |
Long-Term Commitment | Advisors have a continuous obligation to monitor and adjust the client's financial plan. | Periodic reviews are advised, but the focus is on the suitability of initial suggestions. |
Benefits of Working with a Fiduciary Financial Advisor in Anchorage, AK
Deciding to work with a fiduciary financial advisor in Anchorage, AK offers an array of advantages that can profoundly influence your financial health:
- Fiduciary financial advisers are obligated to act in your best interest and maintain ethical standards
- Full disclosure of essential materials and facts and full transparency regarding matters like risks, fees, and potential conflicts of interest, enabling you to make the best decisions for you and your Anchorage, AK family
- Manage investments on your behalf by employing their expertise to develop and manage a diversified portfolio that matches your financial goals and risk tolerance
- Complete financial planning and a holistic approach to your financial well-being, evaluating all facets of your financial life to establish a personalized approach
- Consistent monitoring and advice to guarantee your financial tactics and investments continue to be in line and that you can adapt to any surprises the market or life throws your way
- Reduced risk with wise and judicious investment choices made by thoroughly assessing the risk tied to each investment and modifying your portfolio to correspond with your risk tolerance
- Peace of mind that your best interests are being cared for by skilled financial professionals
- A lasting relationship with a fiduciary financial advisor that grasps your financial goals shift over time, and life scenarios change
What Financial Planning Services Do Fiduciary Advisors Offer?
At Correct Capital Wealth Management, our all-encompassing financial planning services are designed to provide you with a holistic approach to achieving your financial goals. Our team of fiduciary financial advisors in St. Louis functions diligently to understand your unique financial situation and tailor strategies that match your life aspirations.
Personalized Financial Roadmap
We begin by performing a comprehensive analysis of your current financial status, including income, expenses, assets, and liabilities. This helps us create a personalized financial roadmap that caters to your short-term needs and long-term objectives.
Investment Portfolio Management
We create personalized strategies to balance your portfolio, balancing your risk tolerance with your time horizon. Our team consistently monitors and adjusts your investments to meet your financial goals, ensuring that your portfolio remains robust and adaptable as market conditions change.
Retirement Strategy
Planning for retirement is a foundation of our comprehensive financial planning. We guide you through the complexities of retirement accounts, social security benefits, and income strategies to guarantee you can retire with ease and with confidence.
Tax Planning
Effective tax planning helps keep your hard-earned money out of Uncle Sam's hands. Our advisors are expert in tax laws and strategies that can decrease your tax liability and enhance your overall financial health.
Legacy Planning
We also offer educated guidance on estate planning to assist you in protecting your legacy. From wills and trusts to estate tax strategies, we ensure your assets are passed on according to your wishes while reducing tax burdens.
Ongoing Monitoring and Adjustments
Financial planning is not a single event but a constant process. We provide ongoing monitoring and periodic reviews to adjust your financial plan to any shifts in your life circumstances or economic environment.
Client-Focused Strategy
At Correct Capital, our approach is highly client-centric. We pride ourselves on building enduring relationships based on trust, transparency, and personalized service. Your financial well-being is our highest priority, and we are dedicated to helping you achieve your financial goals with integrity and excellence.
Other services we offer in Anchorage, AK include:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Hire Correct Capital as Your Anchorage, AK Fiduciary Financial Advisor
Choosing a financial advisor in Anchorage, AK with a fiduciary standard is essential to ensure your long-term interests stay protected. At Correct Capital Wealth Management, we are honored to be fiduciary financial advisors who place at the forefront the financial success and peace of mind of Anchorage, AK individuals and business owners alike. Our team includes CERTIFIED FINANCIAL PLANNER™ (CFP®) professionals and we are a Registered Investment Advisor (RIA) with the knowledge and qualifications necessary to lead you on your financial journey. We offer all our clients our I.O.U promise: all of our advice will be independent, objective, and unbiased.
Reach out to us now at 314-930-401(k) or contact us through our website to schedule an appointment and find out more about how we can assist you achieve your financial goals in Anchorage, AK.