Fiduciary financial advisor in Denver, CO. For Denver, CO residents who don't have the free time, expertise, or inclination to manage 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 manage your wealth, or saving for your kids' education, you need a financial advisor who you know will treat you and your money well. By choosing a fiduciary financial advisor in Denver, CO, you'll have a confidante who has a legal and ethical obligation to put your own best interests first.
At Correct Capital Wealth Management, our Denver, CO fiduciary financial advisors won't ever propose a product, investment, or approach that we don't sincerely have faith in ourselves. For financial advisors that uphold the fiduciary standard and act with your best interest at heart, reach out to Correct Capital today at 314-930-401(k), contact us online, or schedule a meeting with on of our advisors.
About Fiduciaries
A fiduciary is a individual or organization that occupies a role of confidence and responsibility when handling assets, monetary matters, or legal concerns on behalf of someone else. Fiduciaries are legally and ethically obliged to operate in the best interests of the individual or organization they are representing, often known as their "principal" or "beneficiary". This duty of loyalty and duty of care is known as the fiduciary standard.
Typical examples of fiduciaries include:
- Trustees — People or institutions tasked with handling and overseeing assets held in a trust for the advantage of beneficiaries.
- Executors — People designated to oversee 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 duty to emphasize the client's financial well-being.
- Corporate directors — Representatives of a company's board of directors who are bound to shareholders to try and increase their profit.
- Guardians — Individuals appointed by the court to make decisions on behalf of people under 18 or persons who are not able to make decisions for themselves.
- Attorneys — Legal professionals who are bound by a fiduciary duty to operate 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 important 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 honestly, with sincerity, and without any intention to deceive or harm the interests of their beneficiaries. They must continually 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/beneficiary, which means they must prioritize the beneficiary's interests over their own. They must steer clear of any conflicts of interest that might jeopardize their capacity to act only in the beneficiary's best interests. All conflicts of interest need to be disclosed to the client 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 apply the standard of care, skill, and diligence that a judicious person would employ in the same or similar situations. They must make informed and thoughtful decisions when overseeing assets or making decisions on behalf of their client or beneficiary. This duty confirms that they do their best to shield and increase the assets within their care while minimizing risks.
What Is a Fiduciary Financial Advisor in Denver, CO?
Financial advisors help Denver, CO individuals, families, and business owners achieve their life goals as they relate to their finances. These services include investment choices, retirement planning, tax planning, estate planning, asset management and more.
Any individual in Denver, CO 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 qualifications and certifications from industry organizations such as the CFP Board and Fi360. Securing and retaining these certifications demand continuous education and a rigorous moral standard.
For instance, fiduciary financial advisors with a CERTIFIED FINANCIAL PLANNER™ certification are required to 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 Denver, CO Fiduciaries?
Not all financial advisor in Denver, CO are fiduciaries. The main reason lies in the fact that financial advisors can work under diverse regulatory frameworks and compensation structures, leading to differentiated standards of care:
- Regulatory framework — Financial advisors can be subject to different regulatory oversight depending on their business model. For instance, Registered Investment Advisors (RIAs) are typically fiduciaries. On the other hand, some advisors (for example, those within a broker-dealer model) function under the suitability standard, which requires strategies to be fitting for clients but doesn't require the same duties of loyalty and care.
- Compensation structure — The way financial advisors are compensated may impact their fiduciary status. Fiduciary advisors often charge a percentage fee for their services, making their compensation transparent and reducing conflicts of interest. Non-fiduciary advisors usually receive commissions or other forms of compensation linked to product sales, which means they might make recommendations that are more in their interest than yours.
The Prudent-Person Rule
Fiduciary financial advisors must abide by the Prudent-Person Rule, also known as the prudent investor rule. The rule acknowledges that financial advisors cannot predict the future or determine which investments will be profitable with 100% certainty, but mandates that a fiduciary financial advisor purchase investments that a prudent 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 later unified with the Uniform Prudent Investor Act. Each state can apply their own unique laws. Missouri law, for example, sets out that fiduciary financial advisors must consider:
- General economic conditions
- Possible inflation or deflation
- Expected tax implications of investments
- The role that each investment or course of action plays within your portfolio
- Expected return and appreciation of capital
- Additional assets and resources you have
- Your needs for readily available funds, income, and preservation of capital
- An asset's special 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 operate under the “suitability rule” are merely obligated to recommend investments or products that align with your goals, while financial advisors with a fiduciary duty must operate in your best interest. Here are some key differences:
Fiduciary Duty
- Ethical Responsibility: Fiduciary financial advisors are lawfully and ethically bound to operate in their clients' best interests at all times.
- Client's 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, 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
- Appropriateness: Advisors only need to ensure that their recommendations are suitable for the client’s financial needs 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.
- 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 stipulates that fiduciary advisors must serve in their clients' "best interest," while FINRA Rule 2111 requires that dealer-brokers and other non-fiduciaries only have a "reasonable basis" for their recommendations. 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 | Requires advisors to act in the client's best financial interest. | Mandates advisors to recommend suitable products or strategies based on provided information. |
| Standard of Care | Superior level of care making sure every action conforms with the client's optimal outcome. | Makes certain suggestions are appropriate and make sense for the client's circumstances. |
| Client-Centric Approach | Financial advisors focus on 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 | Full disclosure of potential conflicts of interest is required. | Looser disclosure requirements, so long as the suggestion is proper. |
| 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, necessitating 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 disclose and manage conflicts transparently, ensuring clients are aware of potential biases. | Conflicts are less tightly controlled, as long as the suggestion remains suitable. |
| Long-Term Commitment | Advisors have a continuous obligation to monitor and update the client's financial plan. | Regular reviews are recommended, but the focus is on the suitability of initial suggestions. |
Benefits of Working with a Fiduciary Financial Advisor in Denver, CO
Deciding to work with a fiduciary financial advisor in Denver, CO provides an array of benefits that can significantly impact your financial health:
- Fiduciary financial advisers are obligated to act in your best interest and maintain professional standards
- Complete disclosure of relevant materials and facts and full transparency with matters like risks, fees, and potential conflicts of interest, permitting you to make the optimal decisions for you and your Denver, CO family
- Manage investments on your behalf by leveraging their expertise to craft and manage a diversified portfolio that resonates with your financial goals and risk tolerance
- Complete financial planning and a full approach to your financial well-being, taking into account all facets of your financial life to devise a personalized approach
- Consistent monitoring and direction to ensure your financial strategies and investments remain on track and that you can modify to any curveballs the market or life throws your way
- Reduced risk with sensible and judicious investment choices taken by thoroughly assessing the risk tied to each investment and modifying your portfolio to match your risk tolerance
- Relief that your best interests are being looked after by knowledgeable financial advisors
- A prolonged relationship with a fiduciary financial advisor that understands your financial goals change over time, and life conditions change
What Financial Planning Services Do Fiduciary Advisors Offer?
At Correct Capital Wealth Management, our all-encompassing financial planning services are created to offer you with a holistic approach to achieving 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 performing a comprehensive analysis of your present financial status, including income, expenses, assets, and liabilities. This helps us create a personalized financial roadmap that caters to your short-term needs and long-term objectives.
Financial Portfolio Management
We create 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 align with your financial goals, making sure that your portfolio remains robust and adaptable as market conditions change.
Retirement Planning
Planning for retirement is a key element 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 safely.
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 lower your tax liability and boost your overall financial health.
Estate Planning
We also provide expert guidance on estate planning to assist you in preserving your legacy. From wills and trusts to estate tax strategies, we ensure your assets are allocated according to your wishes while lowering tax burdens.
Continuous Oversight
Financial planning is not a one-time event but a continuous process. We provide ongoing monitoring and regular reviews to adapt your financial plan to any changes in your life circumstances or economic environment.
Client-Centric Approach
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 Denver, CO include:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Hire Correct Capital as Your Denver, CO Fiduciary Financial Advisor
Selecting a financial advisor in Denver, CO with a fiduciary duty is crucial to ensure your long-term interests remain 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 Denver, 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 skills and qualifications essential to guide you on your financial journey. We give all our clients our I.O.U promise: all of our advice will be independent, objective, and unbiased.
Contact us now at 314-930-401(k) or contact us through our website to arrange an appointment and find out more about how we can aid you reach your financial goals in Denver, CO.
