Fiduciary financial advisor in Boston, MA. For those in Boston, MA who lack the time, skill, or interest to handle their assets and retirement accounts on their own, partnering with a financial advisor is a great way to help meet their financial goals. Trust is paramount in that partnership, and whether you're preparing for retirement, looking to grow your wealth, or ensuring a safe financial future for your family, you need a financial advisor who you know will treat you and your money well. By choosing a fiduciary financial advisor in Boston, MA, you'll have a ally who has a legal and ethical obligation to put your own best interests first.
At Correct Capital Wealth Management, our Boston, MA fiduciary financial advisors will never recommend a solution, investment, or strategy that we do not genuinely believe in ourselves. For financial advisors that uphold the fiduciary standard and act with your best interest in mind, call 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 person or entity that occupies a role of confidence and duty when handling assets, monetary matters, or legal concerns for another. Fiduciaries are legally and ethically committed to operate in the best interests of the person 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 — People or institutions charged with handling and monitoring assets held in a trust for the advantage of beneficiaries.
- Executors — Individuals appointed to handle the estate and assets of a decedent as per their will or the law.
- Financial advisors — Professionals who provide financial advice and oversee investments for clients, with an responsibility to prioritize the client's financial goals.
- Corporate directors — Members of a company's board of directors who are given making decisions in the best interests of the shareholders.
- Guardians — People chosen by the court to make decisions on behalf of minors or individuals who are not able to make decisions for themselves.
- Attorneys — Lawyers who are obligated by a fiduciary duty to act in the best interests of their clients when managing their legal affairs.
- Real estate agents — Experts who aid 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 vital facets to understanding fiduciary duty:
1. Good Faith
Fiduciaries are mandated to act in "good faith," which means they interact with their clients or beneficiaries honestly, with genuine intention, and without any design to deceive or infringe upon the interests of their beneficiaries. They must consistently 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 put first the beneficiary's interests ahead of their own. They should avoid any conflicts of interest that might impair their ability to act only in the beneficiary's best interests. All conflicts of interest need to be revealed to the client or beneficiary and the advisor has to still act with the client/beneficiary's interest over their own.
3. Duty of Care
Fiduciaries have a "duty of care" to employ the level of care, skill, and diligence that a wise person would apply in the same or similar situations. They must make informed and considered decisions when managing assets or deciding on behalf of their client or beneficiary. This duty guarantees that they do their best to safeguard and grow the assets within their care while reducing risks.
What Is a Fiduciary Financial Advisor in Boston, MA?
Financial advisors help Boston, MA individuals, families, and business owners achieve their life goals via a variety of financial services and recommendations. These services comprise investment strategies, retirement consulting, tax planning, estate planning, portfolio management and more.
Anyone in Boston, MA can give themselves the title of "financial advisor," but to be 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 credentials and certifications from industry organizations such as the CFP Board and Fi360. Securing and retaining these certifications necessitate ongoing education and a strict moral standard.
To illustrate, 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 Boston, MA Fiduciaries?
Not all financial advisor in Boston, MA is fiduciaries. The primary reason is that financial advisors can function under various regulatory frameworks and compensation structures, leading to divergent standards of care:
- Regulatory framework — Financial advisors might be subject to distinct regulatory oversight depending on their business model. As an example, Registered Investment Advisors (RIAs) are typically fiduciaries. Conversely, some advisors (for example, those within a broker-dealer model) work under the suitability standard, which demands strategies to be fitting for clients but doesn't require the same level of fiduciary duty.
- Compensation structure — The method financial advisors are compensated can affect their fiduciary status. Fiduciary advisors often charge a percentage fee for their services, rendering their compensation clear and limiting conflicts of interest. Other advisors typically receive commissions or different kinds of compensation linked to 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 can't 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 prudent person would purchase based on 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 eventually unified with the Uniform Prudent Investor Act. Each state can apply their own specific laws. Missouri law, for example, stipulates that fiduciary financial advisors must consider:
- Overall economic conditions
- Potential inflation or deflation
- Expected tax implications of investments
- The part that each investment or course of action plays within your portfolio
- Expected profit and appreciation of capital
- Additional assets and resources you possess
- 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 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 investment products 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
- Ethical Responsibility: Fiduciary financial advisors are legally and morally obligated to operate in their clients' best interests at all times.
- Best Interest: Financial advisors must focus on the client's financial health over their own profit.
- Comprehensive Care: They must reveal all conflicts of interest, guarantee transparency, and deliver 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
- Appropriateness: Financial advisors only need to ensure that their suggestions are appropriate for the client’s financial requirements 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 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 appropriate for the client.
- Examples: Some broker-dealers and insurance agents.
Best Interest vs. Reasonable Basis
The Investment Advisers Act of 1940 requires that fiduciary advisors must act in their clients' "best interest," while FINRA Rule 2111 stipulates that dealer-brokers and other non-fiduciaries only have a "reasonable basis" for their suggestions. 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 | Mandates financial advisors to act in the client's most favorable financial interest. | Requires financial advisors to recommend appropriate products or plans based on provided information. |
| Standard of Care | Higher level of care ensuring every action aligns with the client's most favorable outcome. | Guarantees recommendations are suitable and make sense for the client's situation. |
| Client-Centric Approach | Advisors prioritize client's goals, needs, and preferences above their own. | Advisors base suggestions on the client's disclosed financial situation, objectives, and risk tolerance. |
| Transparency | Total disclosure of potential conflicts of interest is mandated. | Less stringent disclosure requirements, so long as the suggestion is suitable. |
| 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 less focus on ongoing oversight. |
| Conflict of Interest | Must reveal and manage 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 adjust 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 Boston, MA
Choosing to partner with a fiduciary financial advisor in Boston, MA brings to the table an array of benefits that can deeply affect your financial health:
- Fiduciary financial advisers must act in your best interest and adhere to professional standards
- Complete disclosure of relevant materials and facts and full transparency concerning matters like risks, fees, and potential conflicts of interest, enabling you to make the most informed decisions for you and your Boston, MA family
- Make investments on your behalf by leveraging their expertise to create and manage a diversified portfolio that resonates with your goals and strategies
- Complete financial planning and a well-rounded approach to your financial well-being, taking into account all facets of your financial life to devise a tailored approach
- Consistent monitoring and guidance to guarantee your financial strategies and investments remain on track and that you can modify to any curveballs the market or life presents your way
- Minimized risk with sensible and judicious investment choices taken by meticulously assessing the risk tied to each investment and modifying your portfolio to correspond with your risk tolerance
- Relief that your best interests are being looked after by knowledgeable financial advisors
- A lasting relationship with a fiduciary financial advisor that understands your financial goals evolve over time, and life situations alter
What Financial Planning Services Do Fiduciary Advisors Offer?
At Correct Capital Wealth Management, our holistic financial planning services are crafted to provide you with a holistic approach to meeting your financial goals. Our team of fiduciary financial advisors in St. Louis works diligently to comprehend your unique financial situation and tailor strategies that align with your life aspirations.
Customized Financial Roadmap
We begin by performing a detailed analysis of your current financial status, including income, expenses, assets, and liabilities. This helps us develop a personalized financial roadmap that caters to your short-term needs and long-term objectives.
Financial Portfolio Management
We develop personalized strategies to diversify your portfolio, balancing your risk tolerance with your time horizon. Our team continuously monitors and adjusts your investments to meet your financial goals, ensuring 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 guide you through the complexities of retirement accounts, social security benefits, and income strategies to guarantee you can retire comfortably and with confidence.
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 decrease your tax liability and improve your overall financial health.
Legacy Planning
We also offer educated guidance on estate planning to help you safeguarding your legacy. From wills and trusts to estate tax strategies, we make certain your assets are allocated according to your wishes while lowering tax burdens.
Continuous Oversight
Financial planning is not a single event but a ongoing process. We provide ongoing monitoring and routine reviews to adjust your financial plan to any alterations in your life circumstances or economic environment.
Client-Centric Approach
At Correct Capital, our approach is profoundly client-centric. We take pride in building lasting 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 Boston, MA include:
Choose Correct Capital as Your Boston, MA Fiduciary Financial Advisor
Choosing a financial advisor in Boston, MA with a fiduciary standard is crucial to ensure your long-term interests remain protected. At Correct Capital Wealth Management, we are proud to be fiduciary financial advisors who hold in high regard the financial success and peace of mind of Boston, MA individuals 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 needed to assist 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 online to arrange an appointment and learn more about how we can aid you achieve your financial goals in Boston, MA.
