Fiduciary financial advisor in Bakersfield, CA. For those in Bakersfield, CA who lack the free time, knowledge, or interest to oversee their investments and retirement accounts on their own, working with a financial advisor provides peace of mind. Trust is paramount in that relationship, and whether you're planning for retirement, looking to manage your wealth, or saving for your kids' education, the knowledge, skill, and integrity of your financial advisor matter greatly. By working with a fiduciary financial advisor in Bakersfield, CA, you'll have a ally who is legally and ethically committed to put your own best interests first.
At Correct Capital Wealth Management, our Bakersfield, CA fiduciary financial advisors will never propose a solution, investment, or approach that we do not sincerely have faith in ourselves. For financial advisors that follow the fiduciary standard and work 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.
About Fiduciaries
A fiduciary is a individual or entity that holds a position of confidence and duty when overseeing assets, finances, or legal matters on behalf of someone else. Fiduciaries are legally and ethically committed to operate in the best interests of the individual or entity they are representing, often known as their "principal" or "beneficiary". This duty of loyalty and duty of care is referred to as the fiduciary standard.
Typical examples of fiduciaries include:
- Trustees — Individuals or entities charged with handling and overseeing assets held in a trust for the benefit of beneficiaries.
- Executors — Individuals designated to oversee the estate and assets of a deceased person as per their will or the law.
- Financial advisors — Professionals who provide financial advice and oversee investments for clients, with an responsibility to put first the client's financial well-being.
- Corporate directors — Representatives of a company's board of directors who are assigned the responsibility of making decisions in the best interests of the shareholders.
- Guardians — Individuals appointed by the court to make decisions on behalf of people under 18 or persons who are unable to make decisions for themselves.
- Attorneys — Legal professionals who are committed by a fiduciary duty to work in the best interests of their clients when handling legal matters.
- Real estate agents — Professionals who help clients in buying, selling, or renting properties and are expected 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 aspects to understanding fiduciary duty:
1. Good Faith
Fiduciaries are obligated to act in "good faith," which means they deal with their clients or beneficiaries honestly, with genuine intention, and without any design to mislead or infringe upon the interests of their beneficiaries. They must continually act with integrity and with the best interests of the clients as a priority.
2. Duty of Loyalty
Fiduciaries owe a "duty of loyalty" to the beneficiary, which means they must put first the beneficiary's interests ahead of their own. They must eschew any conflicts of interest that might jeopardize their capacity to act only in the client's best interests. Any conflicts of interest need to be disclosed to the client or beneficiary and the advisor has 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 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 managing assets or making decisions on behalf of their client or beneficiary. This duty ensures that they do their best to safeguard and increase the assets under their care while mitigating risks.
What Is a Fiduciary Financial Advisor in Bakersfield, CA?
Financial advisors help Bakersfield, CA individuals, families, and business owners attain their life goals through a array of financial services and proposals. These services include investment strategies, retirement planning, tax planning, estate planning, portfolio management and more.
Any person in Bakersfield, CA 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 need to have qualifications and certifications from industry organizations such as the CFP Board and Fi360. Obtaining and retaining these certifications require persistent education and a strict moral standard.
As an example, fiduciary financial advisors with a CERTIFIED FINANCIAL PLANNER™ certification must comply with 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 Bakersfield, CA Fiduciaries?
Not all financial advisor in Bakersfield, CA is fiduciaries. The primary reason lies in the fact that financial advisors can operate under diverse regulatory frameworks and compensation structures, resulting to differentiated standards of care:
- Regulatory framework — Financial advisors might be subject to various regulatory frameworks depending 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 requires 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 usually charge a percentage fee for their services, rendering their compensation clear and minimizing conflicts of interest. Other advisors typically receive commissions or different kinds 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 are required 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 with 100% certainty, but mandates that a fiduciary financial advisor go for 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 subsequently unified with the Uniform Prudent Investor Act. Each state might apply their own specific laws. Missouri law, for example, stipulates that fiduciary financial advisors must consider:
- General economic conditions
- Potential inflation or deflation
- Expected tax consequences of investments
- The role that each investment or approach plays within your portfolio
- Expected return and appreciation of capital
- Additional assets and resources you possess
- Your needs for liquidity, income, and preservation of capital
- An asset's distinctive 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 work under the “suitability rule” are only required to recommend investments or products that match your objectives, while financial advisors with a fiduciary duty must act in your best interest. Here are some key differences:
Fiduciary Duty
- Legal Obligation: Fiduciary financial advisors are legally and morally obligated to act in their clients' best interests at all times.
- Best Interest: Advisors must focus on the client's financial well-being over their own profit.
- Comprehensive Care: They must reveal all conflicts of interest, ensure transparency, and provide the highest level of care in their advice and actions.
- Regulation: Regulated 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
- Appropriateness: Advisors only need to ensure that their suggestions are appropriate for the client’s financial requirements and objectives at the time of the transaction.
- Reduced Care Standard: Advisors can consider their own interests as long as the suggestions are suitable.
- Possible Conflicts: Advisors may earn commissions from the sale of investment products, which can create conflicts of interest.
- Regulation: 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 operate in their clients' "best interest," while FINRA Rule 2111 requires that dealer-brokers and other non-fiduciaries simply have a "reasonable basis" for their recommendations. Here's a summary of what those terms mean in relation to handling a client's investments and financial planning:
| Best Interest | Reasonable Belief | |
|---|---|---|
| Definition | Requires financial advisors to act in the client's most favorable financial interest. | Demands advisors to recommend suitable products or strategies based on available information. |
| Standard of Care | Higher level of care making sure every action matches with the client's optimal outcome. | Ensures recommendations are proper and make sense for the client's circumstances. |
| Client-Centric Approach | Advisors focus on client's goals, needs, and preferences above their own. | Advisors base suggestions on the client's stated financial situation, objectives, and risk tolerance. |
| Transparency | Complete disclosure of potential conflicts of interest is necessary. | Looser disclosure requirements, as long as the suggestion is appropriate. |
| Due Diligence | Recommendations based on a comprehensive evaluation of the client's financial situation. | Recommendations based on reasonable research and analysis. |
| Ongoing Duty | Ongoing duty to act in the client's best interest, demanding regular reviews and updates. | Focuses on the suitability of advice at the time of the recommendation, with less focus on ongoing oversight. |
| Conflict of Interest | Must reveal and manage conflicts transparently, ensuring clients are aware of potential biases. | Conflicts are less strictly regulated, as long as the suggestion remains appropriate. |
| Long-Term Commitment | Advisors have a ongoing obligation to oversee 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 Bakersfield, CA
Opting to collaborate with a fiduciary financial advisor in Bakersfield, CA offers an array of benefits that can deeply affect your monetary health:
- Fiduciary financial advisers are required to act in your best interest and uphold professional standards
- Total disclosure of relevant materials and facts and full transparency regarding matters like risks, fees, and potential conflicts of interest, allowing you to make the best decisions for you and your Bakersfield, CA family
- Make investments on your behalf utilizing their expertise to create and handle a diversified portfolio that matches your financial goals and risk tolerance
- Comprehensive financial planning and a full approach to your financial well-being, taking into account all facets of your financial life to establish a custom approach
- Ongoing monitoring and guidance to guarantee your financial tactics and investments stay aligned and that you can modify to any curveballs the market or life presents your way
- Minimized risk with wise and responsible investment choices done by thoroughly assessing the risk tied to each investment and tailoring your portfolio to match your risk tolerance
- Assurance that your best interests are being looked after by experienced financial professionals
- A long-term relationship with a fiduciary financial advisor that understands your financial goals evolve over time, and life scenarios alter
What Financial Planning Services Do Fiduciary Advisors Offer?
At Correct Capital Wealth Management, our holistic financial planning services are created to offer you with a holistic approach to meeting your financial goals. Our team of fiduciary financial advisors in St. Louis operates diligently to understand your unique financial situation and customize strategies that match your life aspirations.
Personalized Financial Roadmap
We begin by undertaking a comprehensive analysis of your current financial status, including income, expenses, assets, and liabilities. This helps us develop a personalized financial roadmap that addresses your short-term needs and long-term objectives.
Financial Portfolio Management
We craft personalized strategies to balance your portfolio, balancing your risk tolerance with your time horizon. Our team continuously monitors and adjusts your investments to meet your financial goals, making sure that your portfolio remains robust and adaptable as market conditions change.
Retirement Strategy
Planning for retirement is a key element of our comprehensive financial planning. We help you navigate the complexities of retirement accounts, social security benefits, and income strategies to ensure you can retire securely and safely.
Tax Planning
Effective tax planning helps keep your hard-earned money in your pocket and your loved ones. Our advisors are highly knowledgeable in tax laws and strategies that can reduce your tax liability and improve your overall financial health.
Legacy Planning
We also deliver expert guidance on estate planning to assist you in safeguarding your legacy. From wills and trusts to estate tax strategies, we guarantee your assets are passed on according to your wishes while minimizing tax burdens.
Continuous Oversight
Financial planning is not a one-time event but a ongoing process. We deliver 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 take pride in building enduring relationships based on trust, transparency, and personalized service. Your financial well-being is our top priority, and we are committed to helping you attain your financial goals with integrity and excellence.
Other services we offer in Bakersfield, CA include:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Choose Correct Capital as Your Bakersfield, CA Fiduciary Financial Advisor
Selecting a financial advisor in Bakersfield, CA with a fiduciary standard is vital to guarantee your long-term interests stay protected. At Correct Capital Wealth Management, we are pleased to be fiduciary financial advisors who hold in high regard the financial success and peace of mind of Bakersfield, CA residents and business owners alike. Our team includes CERTIFIED FINANCIAL PLANNER™ (CFP®) professionals and we are a Registered Investment Advisor (RIA) with the skills and qualifications necessary to lead you on your financial journey. We provide all our clients our I.O.U promise: all of our advice will be independent, objective, and unbiased.
Get in touch with us today at 314-930-401(k) or contact us online to schedule an appointment and find out more about how we can help you achieve your financial goals in Bakersfield, CA.
