Fiduciary financial advisor in Chattanooga, TN. For those in Chattanooga, TN who don't have the time, expertise, or inclination to oversee their assets and retirement accounts on their own, working with a financial advisor provides peace of mind. Trust is crucial in that relationship, and whether you're planning for retirement, looking to increase your wealth, or ensuring a stable financial future for your family, the knowledge, skill, and integrity of your financial advisor are of utmost importance. By choosing a fiduciary financial advisor in Chattanooga, TN, you'll have a ally who is legally and ethically bound to put your own best interests first.
At Correct Capital Wealth Management, our Chattanooga, TN fiduciary financial advisors will never propose a product, investment, or plan that we do not truly trust in ourselves. For financial advisors that uphold the fiduciary standard and work with your best interest in mind, call Correct Capital now at 314-930-401(k), fill out our online form, or schedule a meeting with on of our advisors.
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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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Understanding Fiduciaries
A fiduciary is a person or organization that occupies a role of trust and duty when managing assets, monetary matters, or legal affairs on behalf of another person. Fiduciaries are legally and ethically bound to act in the best interests of the individual or organization they are serving, 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 institutions responsible for handling and monitoring assets held in a trust for the advantage of beneficiaries.
- Executors — People appointed to manage the estate and assets of a decedent as per their will or the law.
- Financial advisors — Professionals who provide financial advice and handle investments for clients, with an obligation to put first the client's financial goals.
- Corporate directors — Representatives of a company's board of directors who are bound to shareholders to try and increase their profit.
- Guardians — People chosen by the court to make decisions on behalf of minors 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 — Specialists who help 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 crucial 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 truthfully, with genuine intention, and without any intention 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 client/beneficiary, which means they must put first the beneficiary's interests above their own. They should steer clear of any conflicts of interest that could jeopardize their ability to act solely in the beneficiary's best interests. Any conflicts of interest must be revealed 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 exercise the degree of care, skill, and diligence that a prudent person would employ in like circumstances. They must make informed and thoughtful decisions when handling assets or making decisions on behalf of their client or beneficiary. This duty ensures that they work diligently to protect and expand the assets under their care while reducing risks.
What Is a Fiduciary Financial Advisor in Chattanooga, TN?
Financial advisors help Chattanooga, TN individuals, families, and business owners achieve their life goals as they relate to their finances. These services include investment strategies, retirement consulting, tax planning, estate planning, portfolio management and more.
Any individual in Chattanooga, TN 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 have to have credentials and certifications from industry organizations such as the CFP Board and Fi360. Achieving and retaining these certifications necessitate persistent education and a stringent moral standard.
To illustrate, 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 Chattanooga, TN Fiduciaries?
Not all financial advisor in Chattanooga, TN 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 can be subject to distinct regulatory oversight depending on their business model. As an example, Registered Investment Advisors (RIAs) are usually fiduciaries. Conversely, some advisors (for example, those falling 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 method financial advisors are compensated can influence their fiduciary status. Fiduciary advisors often charge a proportional charge for their services, making their compensation open and reducing conflicts of interest. Other advisors generally 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 need 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 know which investments will be profitable with 100% certainty, but mandates that a fiduciary financial advisor purchase investments that a prudent person would purchase based on an acceptable risk considering 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 may apply their own particular laws. Missouri law, for example, sets out that fiduciary financial advisors must consider:
- Overall economic conditions
- Potential inflation or deflation
- Expected tax implications of investments
- The role that each investment or strategy plays within your portfolio
- Expected return and appreciation of capital
- Other 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 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 rule” are merely required to suggest investment products or financial products that match your goals, while financial advisors with a fiduciary duty must operate in your best interest. Here are some key differences:
Fiduciary Duty
- Legal and Ethical Obligation: Fiduciary financial advisors are lawfully and ethically bound to operate in their clients' best interests at all times.
- Best Interest: Financial advisors must prioritize the client's financial health over their own profit.
- Full Disclosure: They must reveal all conflicts of interest, guarantee transparency, and provide the highest level of care in their recommendations and actions.
- Governance: 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
- Suitability: 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: Advisors can consider their own interests as long as the suggestions are appropriate.
- Potential Conflicts: Advisors may earn commissions from the sale of financial products, which can create conflicts of interest.
- Governance: Regulated 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 stipulates that fiduciary advisors must act in their clients' "best interest," while FINRA Rule 2111 stipulates that dealer-brokers and other non-fiduciaries simply have a "reasonable basis" for their suggestions. Here's a breakdown of what those terms mean in relation to dealing with a client's investments and financial planning:
Best Interest | Reasonable Belief | |
---|---|---|
Definition | Requires advisors to act in the client's optimal financial interest. | Demands financial advisors to suggest suitable products or plans based on provided information. |
Standard of Care | Superior level of care making sure every action matches with the client's most favorable outcome. | Guarantees suggestions 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 stated financial situation, objectives, and risk tolerance. |
Transparency | Complete disclosure of potential conflicts of interest is necessary. | Looser disclosure requirements, provided 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 | Unceasing 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 reduced focus on ongoing oversight. |
Conflict of Interest | Must disclose and manage conflicts transparently, ensuring clients are aware of potential biases. | Conflicts are more loosely governed, as long as the recommendation remains appropriate. |
Long-Term Commitment | 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 suggestions. |
Benefits of Working with a Fiduciary Financial Advisor in Chattanooga, TN
Choosing to partner with a fiduciary financial advisor in Chattanooga, TN provides an array of benefits that can deeply impact your financial health:
- Fiduciary financial advisers must act in your best interest and maintain ethical standards
- Full disclosure of relevant materials and facts and full transparency regarding issues like risks, fees, and potential conflicts of interest, allowing you to make the most informed decisions for you and your Chattanooga, TN family
- Handle investments on your behalf by leveraging their expertise to develop and oversee a diversified portfolio that matches your financial goals and risk tolerance
- Comprehensive financial planning and a holistic approach to your financial well-being, considering all facets of your financial life to devise a tailored approach
- Continuous monitoring and advice to ensure your financial tactics and investments stay aligned and that you can modify to any unexpected situations the market or life gives your way
- Diminished risk with wise and accountable investment choices done by meticulously assessing the risk linked with each investment and tailoring your portfolio to correspond with your risk tolerance
- Relief that your best interests are being watched over by skilled financial professionals
- A prolonged relationship with a fiduciary financial advisor that understands your financial goals evolve over time, and life conditions alter
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 reaching your financial goals. Our team of fiduciary financial advisors in St. Louis functions diligently to comprehend your unique financial situation and adapt strategies that match your life aspirations.
Customized Financial Roadmap
We begin by conducting a detailed analysis of your current financial status, including income, expenses, assets, and liabilities. This helps us develop a personalized financial roadmap that meets your short-term needs and long-term objectives.
Investment Portfolio Management
We craft personalized strategies to balance 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, ensuring that your portfolio remains robust and adaptable as market conditions change.
Retirement Planning
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 with ease and safely.
Tax Planning
Effective tax planning ensures more of your hard-earned money with yourself and your loved ones. Our advisors are expert in tax laws and strategies that can reduce your tax liability and enhance your overall financial health.
Legacy Planning
We also deliver 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 allocated according to your wishes while reducing tax burdens.
Continuous Oversight
Financial planning is not a once-off event but a constant process. We provide ongoing monitoring and periodic reviews to modify your financial plan to any changes 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 dedicated to helping you reach your financial goals with integrity and excellence.
Other services we offer in Chattanooga, TN include:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Hire Correct Capital as Your Chattanooga, TN Fiduciary Financial Advisor
Selecting a financial advisor in Chattanooga, TN with a fiduciary duty is crucial to ensure your money is being put to use how you need it to be. At Correct Capital Wealth Management, we are pleased to be fiduciary financial advisors who place at the forefront the financial success and peace of mind of Chattanooga, TN individuals and business owners equally. Our team is comprised of CERTIFIED FINANCIAL PLANNER™ (CFP®) professionals and we are a Registered Investment Advisor (RIA) with the expertise 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.
Reach out to us now at 314-930-401(k) or contact us online to set up an appointment and find out more about how we can aid you achieve your financial goals in Chattanooga, TN.