Fiduciary financial advisor in Kansas City, KS. For those in Kansas City, KS who don't have the time, expertise, or inclination to oversee their investments and retirement accounts on their own, working with a financial advisor is a great way to help meet their financial goals. Trust is crucial in that relationship, and whether you're planning for retirement, looking to manage your wealth, or ensuring a stable financial future for your loved ones, you need a financial advisor who you know will be an honest steward of your assets. By choosing a fiduciary financial advisor in Kansas City, KS, you'll gain a ally who is legally and ethically committed to put your own best interests first.
At Correct Capital Wealth Management, our Kansas City, KS fiduciary financial advisors won't ever suggest a solution, investment, or strategy that we don't truly trust in ourselves. For financial advisors that uphold the fiduciary standard and act with your best interest as their top priority, reach out to Correct Capital today at 314-930-401(k), contact us through our wesbite, or schedule an appointment with a member of our advisor team.
What Is a Fiduciary?
A fiduciary is a individual or entity that holds a role of trust and duty when overseeing assets, finances, or legal concerns on behalf of another. Fiduciaries are legally and ethically obliged to act in the best interests of the person or organization they are representing, often referred to as their "principal" or "beneficiary". This duty of loyalty and duty of care is called the fiduciary standard.
Common examples of fiduciaries are:
- Trustees — Individuals or organizations tasked with managing and monitoring assets held in a trust for the benefit of beneficiaries.
- Executors — Individuals appointed to manage the estate and assets of a deceased person based on their will or the law.
- Financial advisors — Professionals who offer financial advice and handle 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 given making decisions in the best interests of the shareholders.
- Guardians — People chosen by the court to make decisions on behalf of minors or individuals who are unable to make decisions for themselves.
- Attorneys — Legal professionals who are committed by a fiduciary duty to act 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 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 aspects to understanding fiduciary duty:
1. Good Faith
Fiduciaries are mandated to act in "good faith," which means they engage with their clients or beneficiaries with integrity, with genuine intention, and without any design to deceive or infringe upon the interests of their beneficiaries. They must always act honestly 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 above their own. They ought to eschew any conflicts of interest that could compromise their capacity to act exclusively in the beneficiary's best interests. Any conflicts of interest must be disclosed to the client and the advisor must still act with the client/beneficiary's interest above their own.
3. Duty of Care
Fiduciaries have a "duty of care" to apply the level of care, skill, and diligence that a judicious person would use in like circumstances. They must make well-informed and considered decisions when managing assets or deciding on behalf of their client. This duty confirms that they strive to protect and increase the assets under their care while mitigating risks.
What Is a Fiduciary Financial Advisor in Kansas City, KS?
Financial advisors help Kansas City, KS individuals, families, and business owners attain their life goals as they relate to their finances. These services consist of investment strategies, retirement consulting, tax planning, estate planning, asset management and more.
Any individual in Kansas City, KS 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 must possess accreditations and certifications from industry organizations such as the CFP Board and Fi360. Obtaining and maintaining these certifications require persistent education and a strict moral standard.
For instance, fiduciary financial advisors with a CERTIFIED FINANCIAL PLANNER™ certification must adhere to 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 Kansas City, KS Fiduciaries?
Not all financial advisor in Kansas City, KS is fiduciaries. The main reason is that financial advisors can work under various regulatory frameworks and compensation structures, leading to divergent standards of care:
- Regulatory framework — Financial advisors might be subject to various regulatory oversight relying on their business model. For instance, Registered Investment Advisors (RIAs) are generally fiduciaries. Conversely, some advisors (for example, those within 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 manner financial advisors are compensated may impact their fiduciary status. Fiduciary advisors often 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 linked to product sales, which means they may make recommendations that are more in their interest than yours.
The Prudent-Person Rule
Fiduciary financial advisors are required to abide by the Prudent-Person Rule, often known as the prudent investor rule. The rule acknowledges that financial advisors cannot predict the future or determine which investments will be profitable ahead of time, but stipulates that a fiduciary financial advisor go for investments that a reasonable person would purchase based on an acceptable risk in light of the client's goals and investment objective.
The prudent person rule has its origins in in common law, and was subsequently 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:
- General economic conditions
- Potential inflation or deflation
- Expected tax consequences of investments
- The role that each investment or approach plays within your portfolio
- Expected profit and appreciation of capital
- Other assets and resources you own
- Your needs for liquidity, 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 anticipated 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 only required to suggest investments or products that align with your goals, while financial advisors with a fiduciary duty must act in your best interest. Here are some important differences:
Fiduciary Duty
- Ethical Responsibility: Fiduciary financial advisors are legally and morally bound to operate in their clients' best interests at all times.
- Best Interest: Advisors must focus on the client's financial well-being over their own profit.
- Comprehensive Care: They must disclose all conflicts of interest, ensure transparency, and deliver the highest standard of care in their advice and actions.
- Oversight: Governed by the Investment Advisers Act of 1940, which mandates 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 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 suitable.
- Possible Conflicts: Financial advisors may earn commissions from the sale of financial products, which can create conflicts of interest.
- Governance: Governed 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 stipulates 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 breakdown of what those terms mean in relation to handling a client's investments and financial planning:
| Best Interest | Reasonable Belief | |
|---|---|---|
| Definition | Requires financial advisors to act in the client's best financial interest. | Mandates financial advisors to suggest appropriate products or strategies based on available information. |
| Standard of Care | Superior level of care making sure every action matches with the client's optimal outcome. | Makes certain suggestions are suitable and make sense for the client's circumstances. |
| Client-Centric Approach | Advisors focus on client's goals, needs, and preferences above their own. | Advisors base suggestions on the client's stated financial situation, objectives, and risk tolerance. |
| Transparency | Total disclosure of potential conflicts of interest is mandated. | More relaxed disclosure requirements, provided the suggestion is proper. |
| Due Diligence | Suggestions based on a comprehensive evaluation of the client's financial situation. | Recommendations based on adequate research and analysis. |
| Ongoing Duty | Continuous duty to act in the client's best interest, requiring regular reviews and updates. | Stresses 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 less tightly controlled, as long as the suggestion remains suitable. |
| Long-Term Commitment | Financial advisors have a continuous obligation to oversee and update the client's financial plan. | Periodic reviews are advised, but the focus is on the suitability of initial recommendations. |
Benefits of Working with a Fiduciary Financial Advisor in Kansas City, KS
Deciding to work with a fiduciary financial advisor in Kansas City, KS offers an array of advantages that can deeply impact your financial health:
- Fiduciary financial advisers are required to act in your best interest and adhere to high standards
- Total disclosure of essential materials and facts and complete transparency with matters like risks, fees, and potential conflicts of interest, enabling you to make the optimal decisions for you and your Kansas City, KS family
- Handle investments on your behalf by employing their expertise to develop and handle a diversified portfolio that matches your financial goals and risk tolerance
- Thorough financial planning and a full approach to your financial well-being, considering all facets of your financial life to devise a tailored approach
- Continuous monitoring and guidance to ensure your financial plans and investments remain on track and that you can adjust to any curveballs the market or life throws your way
- Reduced risk with wise and judicious investment choices done by thoroughly assessing the risk linked with each investment and modifying your portfolio to align with your risk tolerance
- Relief that your best interests are being watched over by skilled financial professionals
- A lasting relationship with a fiduciary financial advisor that comprehends your financial goals evolve over time, and life situations alter
What Financial Planning Services Do Fiduciary Advisors Offer?
At Correct Capital Wealth Management, our holistic financial planning services are created to provide you with a holistic approach to reaching your financial goals. Our team of fiduciary financial advisors in St. Louis functions diligently to grasp your unique financial situation and customize strategies that suit your life aspirations.
Customized Financial Roadmap
We begin by undertaking 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.
Financial Portfolio Management
We develop personalized strategies to diversify your portfolio, balancing your risk tolerance with your time horizon. Our team consistently monitors and adjusts your investments to meet your financial goals, ensuring that your portfolio remains robust and adaptable to changing market conditions.
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 ensure you can retire comfortably and with confidence.
Tax Planning
Effective tax planning helps keep your hard-earned money in your pocket and your loved ones. 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 deliver informed 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 reducing tax burdens.
Continuous Oversight
Financial planning is not a once-off event but a ongoing process. We offer ongoing monitoring and periodic 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 take pride in building lasting relationships based on trust, transparency, and personalized service. Your financial well-being is our primary priority, and we are committed to helping you achieve your financial goals with integrity and excellence.
Other services we offer in Kansas City, KS include:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Choose Correct Capital as Your Kansas City, KS Fiduciary Financial Advisor
Choosing a financial advisor in Kansas City, KS with a fiduciary duty is crucial to ensure your long-term interests stay protected. At Correct Capital Wealth Management, we are honored to be fiduciary financial advisors who place at the forefront the financial success and peace of mind of Kansas City, KS individuals and business owners alike. 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 give all our clients our I.O.U promise: all of our advice will be independent, objective, and unbiased.
Reach out to us today at 314-930-401(k) or contact us online to schedule an appointment and find out more about how we can assist you reach your financial goals in Kansas City, KS.
