Fiduciary financial advisor in Colorado Springs, CO. For Colorado Springs, CO residents who don't have the free time, skill, or interest to manage their investments and retirement accounts themselves, working with a financial advisor offers peace of mind. That relationship is built on trust, and whether you're preparing for retirement, seeking to manage your wealth, or ensuring a stable financial future for your family, the knowledge, skill, and integrity of your financial advisor matter greatly. By choosing a fiduciary financial advisor in Colorado Springs, CO, you'll gain a ally who is legally and ethically bound to put your own best interests first.
At Correct Capital Wealth Management, our Colorado Springs, CO fiduciary financial advisors won't ever recommend a product, investment, or plan that we don't genuinely believe in ourselves. For financial advisors that adhere to the fiduciary standard and act with your best interest as their top priority, reach out to Correct Capital today at 314-930-401(k), fill out our online form, or schedule a meeting with a member of our advisor team.
What Is a Fiduciary?
A fiduciary is a person or entity that maintains a role of confidence and duty when handling assets, finances, or legal concerns for someone else. Fiduciaries are legally and ethically obliged to act in the best interests of the person or organization they are serving, often known as their "principal" or "beneficiary". This duty of loyalty and duty of care is known as the fiduciary standard.
Frequent examples of fiduciaries include:
- Trustees — People or entities charged with managing and overseeing assets held in a trust for the gain of beneficiaries.
- Executors — People chosen to manage the estate and assets of a deceased person as per their will or the law.
- Financial advisors — Professionals who give financial advice and oversee investments for clients, with an duty to put first the client's financial goals.
- 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 chosen by the court to make decisions on behalf of underage individuals 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 their legal affairs.
- Real estate agents — Specialists 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 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 truthfully, with genuine intention, and without any design to mislead or harm the interests of their beneficiaries. They must continually act with integrity and with the best interests of the clients at the forefront.
2. Duty of Loyalty
Fiduciaries owe a "duty of loyalty" to the client, which means they must prioritize the beneficiary's interests over their own. They ought to eschew any conflicts of interest that might impair their ability to act only in the client's best interests. All conflicts of interest need to be revealed to the client and the advisor needs to 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 use in similar circumstances. They must make informed and considered decisions when overseeing assets or deciding on behalf of their client. This duty guarantees that they strive to protect and increase the assets within their care while mitigating risks.
What Is a Fiduciary Financial Advisor in Colorado Springs, CO?
Financial advisors help Colorado Springs, CO individuals, families, and business owners attain their life goals as they relate to their finances. These services include investment recommendations, retirement consulting, tax planning, estate planning, portfolio management and more.
Any person in Colorado Springs, CO can label themselves a "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 accreditations and certifications from industry organizations such as the CFP Board and Fi360. Obtaining and maintaining these certifications require continuous education and a strict moral standard.
To illustrate, 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 Colorado Springs, CO Fiduciaries?
Not all financial advisor in Colorado Springs, CO are fiduciaries. The primary reason is that financial advisors can function under various regulatory frameworks and compensation structures, resulting to divergent standards of care:
- Regulatory framework — Financial advisors might be subject to distinct regulatory frameworks relying on their business model. As an example, Registered Investment Advisors (RIAs) are usually fiduciaries. In contrast, some advisors (for example, those within a broker-dealer model) operate under the suitability standard, which requires investments to be fitting for clients but does not mandate the same level of fiduciary duty.
- Compensation structure — The way financial advisors are compensated may impact their fiduciary status. Fiduciary advisors typically charge a proportional charge for their services, rendering their compensation transparent and limiting conflicts of interest. Non-fiduciary advisors typically receive commissions or different kinds of compensation tied 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, 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 ahead of time, but mandates that a fiduciary financial advisor go for investments that a reasonable person would purchase considering an acceptable risk in light of the client's goals and investment objective.
The prudent person rule is an early common law principle, and was eventually unified with the Uniform Prudent Investor Act. Each state might apply their own specific laws. Missouri law, for example, sets out that fiduciary financial advisors must consider:
- Overall economic conditions
- Possible inflation or deflation
- Expected tax implications of investments
- The part that each investment or approach plays within your portfolio
- Expected profit and appreciation of capital
- Other assets and resources you own
- Your needs for readily available funds, 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 work under the “suitability standard” are merely required to suggest investments or financial products that match your goals, 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 lawfully and morally bound 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.
- Comprehensive Care: They must reveal all conflicts of interest, ensure transparency, and deliver the highest level of care in their advice 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 recommendations 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 recommendations are appropriate.
- Possible Conflicts: Advisors may receive commissions from the sale of investment products, which can create conflicts of interest.
- Governance: Regulated by the Financial Industry Regulatory Authority (FINRA), which mandates 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 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 | Demands financial advisors to act in the client's most favorable financial interest. | Requires advisors to suggest suitable investment products or strategies based on available information. |
| Standard of Care | Superior level of care ensuring every action aligns with the client's best outcome. | Makes certain suggestions are suitable and make sense for the client's situation. |
| Client-Centric Approach | Advisors prioritize client's objectives, needs, and preferences above their own. | Financial advisors base suggestions on the client's disclosed financial situation, objectives, and risk tolerance. |
| Transparency | Complete disclosure of potential conflicts of interest is required. | Less stringent disclosure requirements, provided the recommendation is proper. |
| Due Diligence | Suggestions based on a comprehensive evaluation of the client's financial situation. | Suggestions based on adequate research and analysis. |
| Ongoing Duty | Continuous duty to act in the client's best interest, requiring regular reviews and updates. | Emphasizes the appropriateness of advice at the time of the recommendation, with minimal focus on ongoing oversight. |
| Conflict of Interest | Must reveal and handle conflicts transparently, ensuring clients are aware of potential biases. | Conflicts are less tightly controlled, as long as the recommendation remains suitable. |
| Long-Term Commitment | Financial advisors have a continuous obligation to oversee and update the client's financial plan. | Periodic reviews are recommended, but the focus is on the suitability of initial recommendations. |
Benefits of Working with a Fiduciary Financial Advisor in Colorado Springs, CO
Opting to collaborate with a fiduciary financial advisor in Colorado Springs, CO offers an array of advantages that can profoundly impact your financial health:
- Fiduciary financial advisers are obligated to act in your best interest and adhere to ethical standards
- Total disclosure of pertinent materials and facts and complete transparency regarding matters like risks, fees, and potential conflicts of interest, permitting you to make the best decisions for you and your Colorado Springs, CO family
- Manage investments on your behalf utilizing their expertise to create and handle a diversified portfolio that resonates with your goals and strategies
- Complete financial planning and a holistic approach to your financial well-being, taking into account all facets of your financial life to establish a personalized approach
- Consistent monitoring and advice to ensure your financial plans and investments remain on track and that you can adapt to any curveballs the market or life gives your way
- Minimized risk with wise and responsible investment choices made by thoroughly assessing the risk tied to each investment and shaping your portfolio to align with your risk tolerance
- Relief that your best interests are being watched over by knowledgeable financial advisors
- A long-term relationship with a fiduciary financial advisor that comprehends your financial goals evolve over time, and life scenarios modify
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 tailor strategies that align with your life aspirations.
Customized Financial Roadmap
We begin by conducting a comprehensive 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 develop personalized strategies to balance your portfolio, balancing your risk tolerance with your time horizon. Our team regularly monitors and adjusts your investments to align with your financial goals, ensuring that your portfolio remains robust and adaptable as market conditions change.
Retirement Planning
Planning for retirement is a foundation of our comprehensive financial planning. We guide you through the complexities of retirement accounts, social security benefits, and income strategies to make certain you can retire comfortably and with confidence.
Tax Planning
Effective tax planning helps keep your hard-earned money out of Uncle Sam's hands. Our advisors are well-versed in tax laws and strategies that can reduce your tax liability and improve your overall financial health.
Estate 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 ensure your assets are allocated according to your wishes while minimizing tax burdens.
Ongoing Monitoring and Adjustments
Financial planning is not a single event but a ongoing process. We offer ongoing monitoring and routine reviews to adapt your financial plan to any alterations in your life circumstances or economic environment.
Client-Focused Strategy
At Correct Capital, our approach is highly client-centric. We pride ourselves on building lasting relationships based on trust, transparency, and personalized service. Your financial well-being is our highest priority, and we are dedicated to helping you reach your financial goals with integrity and excellence.
Other services we offer in Colorado Springs, CO include:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Hire Correct Capital as Your Colorado Springs, CO Fiduciary Financial Advisor
Selecting a financial advisor in Colorado Springs, CO with a fiduciary duty is vital to guarantee your long-term interests remain protected. At Correct Capital Wealth Management, we are proud to be fiduciary financial advisors who place at the forefront the financial success and peace of mind of Colorado Springs, CO residents 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 assist 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 now at 314-930-401(k) or contact us through our website to schedule an appointment and learn more about how we can help you attain your financial goals in Colorado Springs, CO.
