Fiduciary financial advisor in Edwardsville, IL. For Edwardsville, IL residents who lack the time, skill, or inclination to oversee their investments and retirement accounts themselves, partnering with a financial advisor offers peace of mind. That relationship is built on trust, and whether you're preparing for retirement, looking to manage your wealth, or saving for your kids' education, the knowledge, skill, and honesty of your financial advisor are of utmost importance. By choosing a fiduciary financial advisor in Edwardsville, IL, you'll have a partner who is legally and ethically committed to put your own best interests first.
At Correct Capital Wealth Management, our Edwardsville, IL fiduciary financial advisors won't ever propose a product, investment, or strategy that we don't truly trust in ourselves. For financial advisors that adhere to the fiduciary standard and operate with your best interest in mind, reach out to Correct Capital now at 877-930-4015, contact us online, or schedule a meeting with a member of our advisor team.
What Is a Fiduciary?
A fiduciary is a person or entity that occupies a position of trust and responsibility when managing assets, monetary matters, or legal affairs for someone else. Fiduciaries are legally and ethically bound to work in the best interests of the individual or entity they are serving, 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 are:
- Trustees — Individuals or institutions tasked with handling and overseeing assets held in a trust for the gain of beneficiaries.
- Executors — People appointed to handle the estate and assets of a decedent based on their will or the law.
- Financial advisors — Professionals who give financial advice and handle investments for clients, with an duty to put first 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 chosen by the court to make decisions on behalf of people under 18 or persons who are unable to make decisions for themselves.
- Attorneys — Lawyers who are committed by a fiduciary duty to act in the best interests of their clients when managing their legal affairs.
- Real estate agents — Specialists who assist clients in buying, 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 crucial elements to understanding fiduciary duty:
1. Good Faith
Fiduciaries have an obligation to act in "good faith," which means they interact with their clients or beneficiaries honestly, with sincerity, and without any design to mislead or damage the interests of their beneficiaries. They must always 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 prioritize the beneficiary's interests above their own. They ought to steer clear of any conflicts of interest that could impair their ability to act solely in the client's best interests. Every conflicts of interest must be revealed to the client or beneficiary and the advisor has to still act with the beneficiary's interest over their own.
3. Duty of Care
Fiduciaries have a "duty of care" to apply the degree of care, skill, and diligence that a prudent person would employ in the same or similar situations. They must make well-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 safeguard and grow the assets within their care while mitigating risks.
What Is a Fiduciary Financial Advisor in Edwardsville, IL?
Financial advisors help Edwardsville, IL individuals, families, and business owners achieve their life goals as they relate to their finances. These services consist of investment strategies, retirement planning, tax planning, estate planning, portfolio management and more.
Anyone in Edwardsville, IL can label themselves a "financial advisor," but to say that they're a fiduciary, an advisor needs accreditations and certifications from industry organizations such as the CFP Board and Fi360. Securing and retaining these certifications necessitate persistent education and a strict moral standard.
As an example, 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 Edwardsville, IL Fiduciaries?
Not all financial advisor in Edwardsville, IL are fiduciaries. The primary reason is that financial advisors can operate under different regulatory frameworks and compensation structures, leading to varying standards of care:
- Regulatory framework — Financial advisors might be subject to different regulatory oversight relying on their business model. For instance, Registered Investment Advisors (RIAs) are usually fiduciaries. On the other hand, some advisors (for example, those under a broker-dealer model) work under the suitability standard, which requires advice to be fitting for clients but doesn't require the same duties of loyalty and care.
- Compensation structure — The method financial advisors are compensated can influence their fiduciary status. Fiduciary advisors usually charge a proportional charge for their services, rendering their compensation transparent and limiting conflicts of interest. Other advisors usually receive commissions or different kinds of compensation associated with product sales, which means they may make recommendations that are more in their interest than yours.
The Prudent-Person Rule
Fiduciary financial advisors need 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 purchase investments that a reasonable person would purchase based on an acceptable risk considering the client's goals and investment objective.
The prudent person rule has its origins in in common law, and was later unified with the Uniform Prudent Investor Act. Each state might apply their own unique laws. Missouri law, for example, sets out that fiduciary financial advisors must consider:
- General economic conditions
- Potential 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 own
- 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
Benefits of Working with a Fiduciary Financial Advisor in Edwardsville, IL
Choosing to partner with a fiduciary financial advisor in Edwardsville, IL offers an array of benefits that can significantly impact your financial health:
- Fiduciary financial advisers are required to act in your best interest and adhere to high standards
- Full disclosure of pertinent materials and facts and full transparency regarding matters like risks, fees, and potential conflicts of interest, permitting you to make the optimal decisions for you and your Edwardsville, IL family
- Manage investments on your behalf by leveraging their expertise to develop and manage a diversified portfolio that matches 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 tailored approach
- Ongoing monitoring and guidance to ensure your financial tactics and investments remain on track and that you can modify to any curveballs the market or life gives your way
- Reduced risk with wise and accountable investment choices made by meticulously assessing the risk tied to each investment and shaping your portfolio to match your risk tolerance
- Assurance that your best interests are being watched over by knowledgeable financial advisors
- A lasting relationship with a fiduciary financial advisor that grasps your financial goals evolve over time, and life scenarios alter
Choose Correct Capital as Your Edwardsville, IL Fiduciary Financial Advisor
Choosing a financial advisor in Edwardsville, IL with a fiduciary duty is vital to guarantee your money is being put to use how you need it to be. 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 Edwardsville, IL individuals 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 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 877-930-4015 or contact us through our website to set up an appointment and find out more about how we can assist you attain your financial goals in Edwardsville, IL.
