Fiduciary Financial Advisor in Birmingham, AL

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Fiduciary financial advisor in Birmingham, AL. For those in Birmingham, AL who lack the time, expertise, or interest to manage their assets and retirement accounts themselves, partnering with a financial advisor offers peace of mind. Trust is vital in that relationship, and whether you're planning for retirement, looking to increase your wealth, or ensuring a safe financial future for your loved ones, the knowledge, skill, and integrity of your financial advisor matter greatly. By working with a fiduciary financial advisor in Birmingham, AL, you'll have a partner who is legally and ethically committed to put your own best interests first.

At Correct Capital Wealth Management, our Birmingham, AL fiduciary financial advisors won't ever recommend a product, investment, or plan that we don't sincerely trust in ourselves. For financial advisors that adhere to the fiduciary standard and act with your best interest at heart, call Correct Capital now at 314-930-401(k), contact us online, or schedule a meeting with on of our advisors.



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What Is a Fiduciary?

A fiduciary is a person or organization that maintains a role of trust and responsibility when managing assets, monetary matters, or legal concerns for another person. Fiduciaries are legally and ethically obliged to act in the best interests of the person or entity 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 entities tasked with managing and monitoring assets held in a trust for the advantage of beneficiaries.
  • Executors — People chosen to handle the estate and assets of a decedent based on their will or the law.
  • Financial advisors — Professionals who give financial advice and manage investments for clients, with an obligation to prioritize 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 — People chosen by the court to make decisions on behalf of minors or persons who are incapable to make decisions for themselves.
  • Attorneys — Lawyers who are bound by a fiduciary duty to work in the best interests of their clients when handling their legal affairs.
  • Real estate agents — Experts who aid clients in purchasing, 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 vital facets to understanding fiduciary duty:

1. Good Faith

Fiduciaries have an obligation to act in "good faith," which means they engage with their clients or beneficiaries with integrity, with genuine intention, and without any design to mislead or infringe upon the interests of their beneficiaries. They must always 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 client/beneficiary, which means they must prioritize the beneficiary's interests over their own. They must avoid any conflicts of interest that could impair their ability to act only in the client's best interests. Every conflicts of interest need to be made known to the client and the advisor must still act with the client/beneficiary's interest over their own.

3. Duty of Care

Fiduciaries have a "duty of care" to apply the standard of care, skill, and diligence that a wise person would apply in comparable circumstances. They must make well-informed and thoughtful decisions when managing assets or making decisions on behalf of their client or beneficiary. This duty confirms that they work diligently to safeguard and expand the assets under their care while mitigating risks.

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What Is a Fiduciary Financial Advisor in Birmingham, AL?

Financial advisors help Birmingham, AL individuals, families, and business owners attain their life goals by means of a variety of financial services and suggestions. These services consist of investment recommendations, retirement planning, tax planning, estate planning, asset management and others.

Any person in Birmingham, AL 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. 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 are required 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 Birmingham, AL Fiduciaries?

Not all financial advisor in Birmingham, AL 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 can be subject to various regulatory oversight relying on their business model. For example, Registered Investment Advisors (RIAs) are typically fiduciaries. Conversely, some advisors (for example, those under a broker-dealer model) work under the suitability standard, which requires investments to be suitable for clients but does not mandate the same duties of loyalty and care.
  • Compensation structure — The manner financial advisors are compensated can influence their fiduciary status. Fiduciary advisors usually charge a proportional charge for their services, making their compensation clear and limiting conflicts of interest. Non-fiduciary advisors usually receive commissions or different kinds 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 can't predict the future or determine which investments will be profitable ahead of time, but stipulates that a fiduciary financial advisor purchase investments that a sensible person would purchase considering an acceptable risk considering the client's goals and investment objective.

The prudent person rule originates in common law, and was eventually unified with the Uniform Prudent Investor Act. Each state might apply their own specific laws. Missouri law, for example, mandates that fiduciary financial advisors must consider:

  • Overall economic conditions
  • Possible inflation or deflation
  • Expected tax consequences of investments
  • The part that each investment or strategy plays within your portfolio
  • Expected profit and appreciation of capital
  • Additional assets and resources you have
  • Your needs for readily available funds, 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 expected duration of your relationship with the fiduciary financial advisor

Fiduciary Duty vs. Suitability Standard: What’s the Difference?

Advisors who work under the “suitability standard” are only required to suggest investment products or financial products that align with your goals, while advisors with a fiduciary duty must act in your best interest. Here are some key differences:

Fiduciary Duty

  • Legal and Ethical Responsibility: Fiduciary financial advisors are lawfully and morally bound to act in their clients' best interests at all times.
  • Client's Best Interest: Financial advisors must focus on the client's financial well-being over their own profit.
  • Full Disclosure: They must disclose all conflicts of interest, ensure transparency, and deliver the highest standard of care in their recommendations and actions.
  • Oversight: 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: Advisors merely need to ensure that their recommendations are appropriate for the client’s financial needs and objectives at the time of the transaction.
  • Lower Standard of Care: Advisors can take into account their own interests as long as the recommendations are appropriate.
  • Possible Conflicts: Financial advisors may receive commissions from the sale of financial products, which can create conflicts of interest.
  • Regulation: Regulated by the Financial Industry Regulatory Authority (FINRA), which requires a “reasonable basis” that an investment is suitable for the client.
  • Instances: 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 mandates that dealer-brokers and other non-fiduciaries only have a "reasonable basis" for their suggestions. Here's a breakdown of what those terms mean in relation to managing a client's investments and financial planning:


Best Interest Reasonable Belief
Definition Demands financial advisors to act in the client's optimal financial interest. Mandates advisors to recommend appropriate investment products or strategies based on available information.
Standard of Care Superior level of care ensuring every action conforms with the client's most favorable outcome. Ensures suggestions are proper and make sense for the client's situation.
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 mandated. Less stringent disclosure requirements, so long as the suggestion 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, necessitating regular reviews and updates. Stresses the appropriateness 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 recommendation remains suitable.
Long-Term Commitment Advisors have a continuous obligation to monitor and update the client's financial plan. Periodic reviews are suggested, but the focus is on the suitability of initial recommendations.

Benefits of Working with a Fiduciary Financial Advisor in Birmingham, AL

Deciding to work with a fiduciary financial advisor in Birmingham, AL provides an array of advantages that can deeply affect your financial health:

  • Fiduciary financial advisers are obligated to act in your best interest and uphold high standards
  • Complete disclosure of pertinent materials and facts and complete transparency regarding matters like risks, fees, and potential conflicts of interest, enabling you to make the most informed decisions for you and your Birmingham, AL family
  • Manage investments on your behalf by leveraging their expertise to craft and handle a diversified portfolio that matches your goals and strategies
  • Thorough financial planning and a full approach to your financial well-being, considering all facets of your financial life to create a tailored approach
  • Continuous monitoring and direction to guarantee your financial tactics and investments stay aligned and that you can adjust to any surprises the market or life presents your way
  • Minimized risk with sensible and accountable investment choices done 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 looked after by skilled financial advisors
  • A long-term relationship with a fiduciary financial advisor that understands your financial goals change over time, and life conditions modify

What Financial Planning Services Do Fiduciary Advisors Offer?

At Correct Capital Wealth Management, our comprehensive financial planning services are crafted 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 tailor strategies that match your life aspirations.


Personalized Financial Roadmap

We begin by conducting a comprehensive analysis of your current financial status, including income, expenses, assets, and liabilities. This helps us create a personalized financial roadmap that addresses your short-term needs and long-term objectives.


Investment Portfolio Management

We craft personalized strategies to diversify your portfolio, making sure your risk tolerance aligns with your time horizon. Our team regularly monitors and adjusts your investments to meet your financial goals, making sure that your portfolio remains robust and adaptable to changing market conditions.


Retirement Strategy

Planning for retirement is a cornerstone of our comprehensive financial planning. We help you navigate the complexities of retirement accounts, social security benefits, and income strategies to make certain you can retire with ease and securely.


Tax Planning

Effective tax planning ensures more of your hard-earned money out of Uncle Sam's hands. Our advisors are highly knowledgeable in tax laws and strategies that can reduce your tax liability and enhance your overall financial health.


Estate Planning

We also provide educated guidance on estate planning to assist you in protecting your legacy. From wills and trusts to estate tax strategies, we make certain your assets are distributed according to your wishes while reducing tax burdens.


Ongoing Monitoring and Adjustments

Financial planning is not a single event but a ongoing process. We provide ongoing monitoring and periodic reviews to adjust your financial plan to any changes in your life circumstances or economic environment.


Client-Focused Strategy

At Correct Capital, our approach is highly client-centric. We take pride in building long-lasting relationships based on trust, transparency, and personalized service. Your financial well-being is our top priority, and we are devoted to helping you reach your financial goals with integrity and excellence.

Other services we offer in Birmingham, AL include:


Hire Correct Capital as Your Birmingham, AL Fiduciary Financial Advisor

Choosing a financial advisor in Birmingham, AL with a fiduciary standard is vital to ensure your long-term interests stay protected. At Correct Capital Wealth Management, we are honored to be fiduciary financial advisors who hold in high regard the financial success and peace of mind of Birmingham, AL residents and business owners equally. 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.

Get in touch with us now at 314-930-401(k) or contact us through our website to arrange an appointment and learn more about how we can help you attain your financial goals in Birmingham, AL.

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