Fiduciary financial advisor in Grand Rapids, MI. For Grand Rapids, MI residents who lack the time, expertise, or inclination to handle their assets and retirement accounts themselves, working with a financial advisor offers peace of mind. That relationship is built on trust, and whether you're planning for retirement, seeking to increase your wealth, or saving for your kids' education, the knowledge, skill, and honesty of your financial advisor matter greatly. By choosing a fiduciary financial advisor in Grand Rapids, MI, you'll gain a partner who has a legal and ethical responsibility to put your own best interests first.
At Correct Capital Wealth Management, our Grand Rapids, MI fiduciary financial advisors will never recommend a product, investment, or approach that we do not truly believe in ourselves. For financial advisors that adhere to the fiduciary standard and operate with your best interest at heart, reach out to 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 organization that maintains a role of trust and duty when handling assets, monetary matters, or legal affairs for someone else. Fiduciaries are legally and ethically obliged to act in the best interests of the individual or organization 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 — People or institutions tasked with managing and monitoring assets held in a trust for the advantage of beneficiaries.
- Executors — People designated to manage the estate and assets of a deceased person according to their will or the law.
- Financial advisors — Professionals who give financial advice and oversee investments for clients, with an responsibility to emphasize the client's financial goals.
- Corporate directors — Individuals 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 incapable to make decisions for themselves.
- Attorneys — Lawyers who are obligated by a fiduciary duty to work in the best interests of their clients when dealing with legal matters.
- Real estate agents — Experts who help 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 important 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 with integrity, with sincerity, and without any intention to mislead or infringe upon the interests of their beneficiaries. They must always 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, which means they must prioritize the beneficiary's interests ahead of their own. They must avoid any conflicts of interest that might compromise their capacity to act solely in the beneficiary's best interests. Every conflicts of interest need to be disclosed to the client and the advisor must still act with the beneficiary's interest above their own.
3. Duty of Care
Fiduciaries have a "duty of care" to exercise the standard of care, skill, and diligence that a prudent person would apply 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 do their best to safeguard and expand the assets within their care while minimizing risks.
What Is a Fiduciary Financial Advisor in Grand Rapids, MI?
Financial advisors help Grand Rapids, MI individuals, families, and business owners achieve their life goals by means of a range of financial services and proposals. These services comprise investment choices, retirement planning, tax planning, estate planning, asset management and others.
Any individual in Grand Rapids, MI can label themselves a "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 accreditations and certifications from industry organizations such as the CFP Board and Fi360. Securing and maintaining these certifications require continuous education and a strict moral standard.
For instance, fiduciary financial advisors with a CERTIFIED FINANCIAL PLANNER™ certification need 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 Grand Rapids, MI Fiduciaries?
Not all financial advisor in Grand Rapids, MI is fiduciaries. The key reason is that financial advisors can function under various 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. For instance, Registered Investment Advisors (RIAs) are generally fiduciaries. In contrast, some advisors (for example, those under a broker-dealer model) function under the suitability standard, which requires recommendations to be appropriate for clients but doesn't require the same duties of loyalty and care.
- Compensation structure — The manner financial advisors are compensated can influence their fiduciary status. Fiduciary advisors usually charge a proportional charge for their services, rendering their compensation open and reducing conflicts of interest. Non-fiduciary advisors typically receive commissions or different kinds of compensation associated with 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, 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 select investments that a prudent person would purchase from an acceptable risk based on 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 may apply their own unique laws. Missouri law, for example, sets out that fiduciary financial advisors must consider:
- Overall economic conditions
- Potential inflation or deflation
- Expected tax consequences of investments
- The role that each investment or course of action plays within your portfolio
- Expected profit and appreciation of capital
- Additional assets and resources you have
- Your needs for liquidity, 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 operate under the “suitability standard” are merely obligated to suggest investment products or 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
- Ethical Responsibility: Fiduciary financial advisors are legally and ethically obligated to act in their clients' best interests at all times.
- Client's Best Interest: Financial advisors must focus on the client's financial health over their own profit.
- Full Disclosure: They must disclose all conflicts of interest, ensure transparency, and provide the highest level of care in their advice and actions.
- Oversight: 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: Financial advisors merely 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.
- Potential 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 mandates a “reasonable basis” that an investment is suitable for the client.
- Instances: 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 stipulates 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 managing a client's investments and financial planning:
| Best Interest | Reasonable Belief | |
|---|---|---|
| Definition | Mandates financial advisors to act in the client's best financial interest. | Requires advisors to suggest appropriate products or strategies based on available information. |
| Standard of Care | Higher level of care ensuring every action aligns with the client's best outcome. | Ensures suggestions are suitable and make sense for the client's circumstances. |
| Client-Centric Approach | Advisors focus on client's objectives, needs, and preferences above their own. | Financial advisors base recommendations on the client's stated financial situation, objectives, and risk tolerance. |
| Transparency | Complete disclosure of potential conflicts of interest is necessary. | More relaxed 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 | Continuous 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 handle conflicts openly, ensuring clients are aware of potential biases. | Conflicts are more loosely governed, as long as the suggestion remains suitable. |
| Long-Term Commitment | Advisors have a ongoing 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 Grand Rapids, MI
Opting to collaborate with a fiduciary financial advisor in Grand Rapids, MI offers an array of advantages that can profoundly impact your financial health:
- Fiduciary financial advisers must act in your best interest and maintain high standards
- Full disclosure of relevant materials and facts and full transparency concerning matters like risks, fees, and potential conflicts of interest, allowing you to make the optimal decisions for you and your Grand Rapids, MI family
- Manage investments on your behalf by leveraging their expertise to develop and handle a diversified portfolio that aligns with your financial goals and risk tolerance
- Complete financial planning and a well-rounded approach to your financial well-being, evaluating all facets of your financial life to establish a custom approach
- Continuous monitoring and guidance to ensure your financial plans and investments continue to be in line and that you can adjust to any surprises the market or life presents your way
- Diminished risk with sensible and responsible investment choices taken by thoroughly assessing the risk linked with each investment and tailoring your portfolio to match your risk tolerance
- Relief that your best interests are being watched over by skilled financial advisors
- A prolonged relationship with a fiduciary financial advisor that comprehends your financial goals change over time, and life conditions modify
What Financial Planning Services Do Fiduciary Advisors Offer?
At Correct Capital Wealth Management, our all-encompassing financial planning services are created to provide you with a holistic approach to achieving your financial goals. Our team of fiduciary financial advisors in St. Louis operates diligently to comprehend your unique financial situation and tailor strategies that suit your life aspirations.
Customized Financial Roadmap
We begin by performing a detailed analysis of your present 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 create personalized strategies to diversify your portfolio, making sure your risk tolerance aligns with your time horizon. Our team consistently monitors and adjusts your investments to match your financial goals, making sure that your portfolio remains robust and adaptable to changing market conditions.
Retirement Strategy
Planning for retirement is a key element of our comprehensive financial planning. We assist you in navigating the complexities of retirement accounts, social security benefits, and income strategies to ensure you can retire securely and with confidence.
Tax Planning
Effective tax planning ensures more of your hard-earned money with yourself and your loved ones. Our advisors are well-versed in tax laws and strategies that can decrease your tax liability and boost your overall financial health.
Estate Planning
We also offer expert guidance on estate planning to assist you in preserving your legacy. From wills and trusts to estate tax strategies, we make certain your assets are distributed according to your wishes while reducing tax burdens.
Ongoing Monitoring and Adjustments
Financial planning is not a single event but a ongoing process. We provide ongoing monitoring and regular reviews to modify your financial plan to any alterations in your life circumstances or economic environment.
Client-Focused Strategy
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 devoted to helping you achieve your financial goals with integrity and excellence.
Other services we offer in Grand Rapids, MI include:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Choose Correct Capital as Your Grand Rapids, MI Fiduciary Financial Advisor
Selecting a financial advisor in Grand Rapids, MI with a fiduciary duty is crucial to guarantee your money is being put to use how you need it to be. At Correct Capital Wealth Management, we are honored to be fiduciary financial advisors who hold in high regard the financial success and peace of mind of Grand Rapids, MI 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 knowledge and qualifications essential to assist 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.
Get in touch with us today at 314-930-401(k) or contact us online to arrange an appointment and find out more about how we can aid you attain your financial goals in Grand Rapids, MI.
