Fiduciary financial advisor in Aurora, CO. For Aurora, CO residents who don't have the time, knowledge, or interest to oversee their investments and retirement accounts themselves, partnering with a financial advisor offers peace of mind. That relationship is built on trust, and whether you're preparing for retirement, looking to grow your wealth, or saving for your kids' education, you need a financial advisor who you know will be an honest steward of your assets. By working with a fiduciary financial advisor in Aurora, CO, you'll have a partner who has a legal and ethical obligation to put your own best interests first.
At Correct Capital Wealth Management, our Aurora, CO fiduciary financial advisors will never propose a product, investment, or plan that we do not genuinely have faith in ourselves. For financial advisors that follow the fiduciary standard and work with your best interest in mind, get in touch with Correct Capital today at 314-930-401(k), fill out our online form, or schedule a meeting with a member of our advisor team.
About Fiduciaries
A fiduciary is a person or entity that maintains a position of trust and responsibility when managing assets, finances, or legal matters for someone else. Fiduciaries are legally and ethically bound to act in the best interests of the person or organization they are representing, often known as their "principal" or "beneficiary". This duty of loyalty and duty of care is called the fiduciary standard.
Typical examples of fiduciaries are:
- Trustees — People or institutions tasked with handling and overseeing assets held in a trust for the benefit of beneficiaries.
- Executors — People appointed to oversee the estate and assets of a decedent based on their will or the law.
- Financial advisors — Professionals who offer financial advice and handle investments for clients, with an responsibility to emphasize the client's financial well-being.
- Corporate directors — Representatives of a company's board of directors who are assigned making decisions in the best interests of the shareholders.
- Guardians — People chosen by the court to make decisions on behalf of people under 18 or people who are incapable 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 managing their legal affairs.
- Real estate agents — Specialists who assist clients in purchasing, 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 crucial elements to understanding fiduciary duty:
1. Good Faith
Fiduciaries are required to act in "good faith," which means they interact with their clients or beneficiaries honestly, with sincerity, and without any aim to deceive or damage the interests of their beneficiaries. They must always act honestly and with the best interests of the clients as a priority.
2. Duty of Loyalty
Fiduciaries owe a "duty of loyalty" to the client, which means they must prioritize the beneficiary's interests ahead of their own. They should steer clear of any conflicts of interest that could jeopardize their capacity to act only in the client's best interests. Any conflicts of interest need to be made known to the client or beneficiary and the advisor must still act with the beneficiary's interest over their own.
3. Duty of Care
Fiduciaries have a "duty of care" to apply the degree of care, skill, and diligence that a prudent person would use in the same or similar situations. They must make well-informed and careful decisions when overseeing assets or deciding on behalf of their client or beneficiary. This duty ensures that they do their best to protect and expand the assets under their care while minimizing risks.
What Is a Fiduciary Financial Advisor in Aurora, CO?
Financial advisors help Aurora, CO individuals, families, and business owners realize their life goals as they relate to their finances. These services include investment recommendations, retirement planning, tax planning, estate planning, portfolio management and more.
Anyone in Aurora, CO 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 have to have qualifications and certifications from industry organizations such as the CFP Board and Fi360. Achieving and keeping these certifications require ongoing education and a stringent moral standard.
For instance, fiduciary financial advisors with a CERTIFIED FINANCIAL PLANNER™ certification must 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 Aurora, CO Fiduciaries?
Not all financial advisor in Aurora, CO is fiduciaries. The main reason lies in the fact that financial advisors can operate under diverse regulatory frameworks and compensation structures, leading to divergent standards of care:
- Regulatory framework — Financial advisors might be subject to distinct regulatory oversight relying on their business model. As an example, Registered Investment Advisors (RIAs) are typically fiduciaries. Conversely, some advisors (for example, those under a broker-dealer model) operate under the suitability standard, which mandates strategies to be suitable for clients but does not mandate the same level of fiduciary duty.
- Compensation structure — The manner financial advisors are compensated can influence their fiduciary status. Fiduciary advisors typically charge a proportional charge for their services, making their compensation clear and limiting conflicts of interest. Other advisors typically receive commissions or other forms of compensation associated with product sales, which means you can't be sure that their recommendations are 100% for your benefit.
The Prudent-Person Rule
Fiduciary financial advisors need to abide by the Prudent-Person Rule, often known as the prudent investor rule. The rule acknowledges that financial advisors cannot predict the future or know which investments will be profitable ahead of time, 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 has its origins in in common law, and was later unified with the Uniform Prudent Investor Act. Each state may apply their own unique laws. Missouri law, for example, sets out that fiduciary financial advisors must consider:
- General economic conditions
- Potential inflation or deflation
- Expected tax consequences of investments
- The part that each investment or strategy plays within your portfolio
- Expected return and appreciation of capital
- Other assets and resources you own
- Your needs for liquidity, income, and preservation of capital
- An asset's unique 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 only required to recommend investments or financial products that align with your objectives, while financial advisors with a fiduciary duty must operate in your best interest. Here are some key differences:
Fiduciary Duty
- Legal Responsibility: Fiduciary financial advisors are lawfully and morally obligated to act in their clients' best interests at all times.
- Client's Best Interest: Financial advisors must prioritize the client's financial well-being over their own profit.
- Full Disclosure: They must reveal all conflicts of interest, ensure transparency, and provide the highest level of care in their advice and actions.
- Governance: Governed by the Investment Advisers Act of 1940, which mandates that investment advisors have a fiduciary duty to their clients.
- ExamplesInstances: Registered Investment Advisors (RIAs) and CERTIFIED FINANCIAL PLANNER™ professionals.
Suitability Standard
- Appropriateness: Financial advisors merely 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: Financial advisors can take into account their own interests as long as the suggestions are suitable.
- Possible Conflicts: Financial advisors may earn commissions from the sale of investment products, which can create conflicts of interest.
- Governance: Governed by the Financial Industry Regulatory Authority (FINRA), which requires a “reasonable basis” that an investment is suitable for the client.
- Examples: Some broker-dealers and insurance agents.
Best Interest vs. Reasonable Basis
The Investment Advisers Act of 1940 mandates that fiduciary advisors must serve in their clients' "best interest," while FINRA Rule 2111 requires that dealer-brokers and other non-fiduciaries simply have a "reasonable basis" for their suggestions. Here's a summary of what those terms mean in relation to dealing with a client's investments and financial planning:
| Best Interest | Reasonable Belief | |
|---|---|---|
| Definition | Requires financial advisors to act in the client's best financial interest. | Demands advisors to recommend suitable investment products or strategies based on available information. |
| Standard of Care | Elevated level of care ensuring every action conforms with the client's optimal outcome. | Makes certain suggestions are appropriate and make sense for the client's circumstances. |
| Client-Centric Approach | Advisors prioritize client's goals, needs, and preferences above their own. | Financial advisors base recommendations on the client's disclosed financial situation, objectives, and risk tolerance. |
| Transparency | Complete disclosure of potential conflicts of interest is necessary. | Less stringent disclosure requirements, so long as the recommendation is appropriate. |
| Due Diligence | Recommendations based on a comprehensive evaluation of the client's financial situation. | Suggestions based on adequate research and analysis. |
| Ongoing Duty | Ongoing duty to act in the client's best interest, requiring regular reviews and updates. | Focuses on the suitability of advice at the time of the recommendation, with minimal focus on ongoing oversight. |
| Conflict of Interest | Must reveal and handle conflicts openly, ensuring clients are aware of potential biases. | Conflicts are less tightly controlled, as long as the suggestion remains appropriate. |
| Long-Term Commitment | Financial advisors have a continuous obligation to monitor and update the client's financial plan. | Regular reviews are suggested, but the focus is on the suitability of initial recommendations. |
Benefits of Working with a Fiduciary Financial Advisor in Aurora, CO
Choosing to partner with a fiduciary financial advisor in Aurora, CO brings to the table an array of advantages that can deeply impact your monetary health:
- Fiduciary financial advisers are required to act in your best interest and adhere to professional standards
- Complete disclosure of pertinent materials and facts and complete transparency concerning matters like risks, fees, and potential conflicts of interest, allowing you to make the optimal decisions for you and your Aurora, CO family
- Handle investments on your behalf utilizing their expertise to craft and manage a diversified portfolio that aligns with your financial goals and risk tolerance
- Thorough financial planning and a holistic approach to your financial well-being, taking into account all facets of your financial life to devise a tailored approach
- Continuous monitoring and direction to guarantee your financial tactics and investments stay aligned and that you can modify to any curveballs the market or life presents your way
- Reduced risk with sensible and responsible investment choices done by thoroughly assessing the risk tied to each investment and shaping your portfolio to correspond with your risk tolerance
- Assurance that your best interests are being looked after by skilled financial advisors
- A lasting relationship with a fiduciary financial advisor that comprehends your financial goals change over time, and life situations change
What Financial Planning Services Do Fiduciary Advisors Offer?
At Correct Capital Wealth Management, our comprehensive financial planning services are designed to provide you with a holistic approach to meeting your financial goals. Our team of fiduciary financial advisors in St. Louis functions diligently to grasp your unique financial situation and adapt strategies that suit your life aspirations.
Customized Financial Roadmap
We begin by undertaking a thorough analysis of your present 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 diversify your portfolio, making sure your risk tolerance aligns with your time horizon. Our team consistently monitors and adjusts your investments to align with your financial goals, ensuring that your portfolio remains robust and adaptable as market conditions change.
Retirement Strategy
Planning for retirement is a cornerstone of our comprehensive financial planning. We assist you in navigating the complexities of retirement accounts, social security benefits, and income strategies to make certain you can retire comfortably and securely.
Tax Planning
Effective tax planning ensures more of your hard-earned money in your pocket and your loved ones. Our advisors are highly knowledgeable in tax laws and strategies that can lower your tax liability and enhance your overall financial health.
Legacy Planning
We also provide expert guidance on estate planning to help you preserving your legacy. From wills and trusts to estate tax strategies, we ensure your assets are distributed according to your wishes while minimizing tax burdens.
Continuous Oversight
Financial planning is not a single event but a constant process. We offer ongoing monitoring and routine reviews to modify your financial plan to any alterations in your life circumstances or economic environment.
Client-Focused Strategy
At Correct Capital, our approach is deeply client-centric. We pride ourselves on building long-lasting relationships based on trust, transparency, and personalized service. Your financial well-being is our top priority, and we are committed to helping you reach your financial goals with integrity and excellence.
Other services we offer in Aurora, CO include:
Hire Correct Capital as Your Aurora, CO Fiduciary Financial Advisor
Choosing a financial advisor in Aurora, CO with a fiduciary standard is crucial to ensure your money is being put to use how you need it to be. 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 Aurora, CO residents and business owners alike. Our team is comprised of CERTIFIED FINANCIAL PLANNER™ (CFP®) professionals and we are a Registered Investment Advisor (RIA) with the expertise and qualifications essential to guide you on your financial journey. We give all our clients our I.O.U promise: all of our advice will be independent, objective, and unbiased.
Get in touch with us now at 314-930-401(k) or contact us through our website to arrange an appointment and find out more about how we can help you achieve your financial goals in Aurora, CO.
