Fiduciary financial advisor in Kansas City, MO. For Kansas City, MO residents who don't have the free time, expertise, or interest to handle their investments and retirement accounts themselves, partnering with a financial advisor is a great way to help meet their financial goals. Trust is crucial in that partnership, and whether you're planning for retirement, seeking to grow your wealth, or saving for your kids' education, the knowledge, skill, and honesty of your financial advisor are of utmost importance. By working with a fiduciary financial advisor in Kansas City, MO, you'll gain a confidante who has a legal and ethical responsibility to put your own best interests first.
At Correct Capital Wealth Management, our Kansas City, MO fiduciary financial advisors won't ever suggest a product, investment, or approach that we don't sincerely believe in ourselves. For financial advisors that uphold the fiduciary standard and work with your best interest in mind, get in touch with 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 individual or entity that maintains a role of trust and responsibility when overseeing assets, finances, or legal affairs on behalf of someone else. Fiduciaries are legally and ethically committed to operate 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 known as the fiduciary standard.
Frequent examples of fiduciaries include:
- Trustees — People or institutions tasked with managing and monitoring assets held in a trust for the advantage of beneficiaries.
- Executors — Individuals designated to oversee the estate and assets of a decedent based on their will or the law.
- Financial advisors — Professionals who provide financial advice and handle investments for clients, with an responsibility to prioritize the client's financial goals.
- 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 people 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 their cases.
- Real estate agents — Specialists who aid 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 vital aspects to understanding fiduciary duty:
1. Good Faith
Fiduciaries are obligated to act in "good faith," which means they interact with their clients or beneficiaries truthfully, with sincerity, and without any design to deceive or damage the interests of their beneficiaries. They must consistently act honestly and with the best interests of the clients in mind.
2. Duty of Loyalty
Fiduciaries owe a "duty of loyalty" to the client, which means they must put first the beneficiary's interests above their own. They must steer clear of any conflicts of interest that could compromise their capacity to act solely in the beneficiary's best interests. Any conflicts of interest must be disclosed to the client 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 exercise the standard of care, skill, and diligence that a wise person would employ in comparable circumstances. They must make well-informed and careful decisions when handling assets or deciding on behalf of their client or beneficiary. This duty guarantees that they strive to shield and grow the assets under their care while mitigating risks.
What Is a Fiduciary Financial Advisor in Kansas City, MO?
Financial advisors help Kansas City, MO individuals, families, and business owners realize their life goals via a variety of financial services and suggestions. These services include investment choices, retirement planning, tax planning, estate planning, asset management and more.
Any individual in Kansas City, MO 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 need to have qualifications and certifications from industry organizations such as the CFP Board and Fi360. Achieving and retaining these certifications demand persistent education and a rigorous moral standard.
To illustrate, 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 Kansas City, MO Fiduciaries?
Not all financial advisor in Kansas City, MO is fiduciaries. The main reason lies in the fact that financial advisors can operate under various regulatory frameworks and compensation structures, resulting to differentiated standards of care:
- Regulatory framework — Financial advisors might be subject to distinct regulatory frameworks depending on their business model. For instance, Registered Investment Advisors (RIAs) are typically fiduciaries. Conversely, some advisors (for example, those within a broker-dealer model) function 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 method financial advisors are compensated can influence their fiduciary status. Fiduciary advisors usually charge a proportional charge for their services, making their compensation clear and minimizing conflicts of interest. Non-fiduciary advisors typically 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 can't predict the future or know which investments will be profitable ahead of time, but stipulates that a fiduciary financial advisor go for investments that a prudent 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 subsequently unified with the Uniform Prudent Investor Act. Each state may 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 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 possess
- 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
Fiduciary Duty vs. Suitability Standard: What’s the Difference?
Advisors who work under the “suitability rule” are only obligated to recommend investments or products that align with your objectives, while financial advisors with a fiduciary duty must operate in your best interest. Here are some key differences:
Fiduciary Duty
- Legal Responsibility: Fiduciary financial advisors are lawfully and ethically obligated to operate in their clients' best interests at all times.
- Client's Best Interest: Advisors must prioritize the client's financial well-being over their own profit.
- Full Disclosure: They must disclose all conflicts of interest, guarantee 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
- Suitability: Financial advisors merely 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: Financial advisors can consider their own interests as long as the suggestions are suitable.
- Potential Conflicts: 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 suitable for the client.
- Instances: Some broker-dealers and insurance agents.
Best Interest vs. Reasonable Basis
The Investment Advisers Act of 1940 stipulates that fiduciary advisors must operate in their clients' "best interest," while FINRA Rule 2111 requires that dealer-brokers and other non-fiduciaries simply have a "reasonable basis" for their recommendations. 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. | Demands advisors to suggest suitable investment products or plans based on available information. |
| Standard of Care | Elevated level of care ensuring every action aligns with the client's optimal outcome. | Makes certain recommendations are suitable and make sense for the client's circumstances. |
| Client-Centric Approach | Advisors prioritize client's goals, needs, and preferences above their own. | Financial advisors base recommendations on the client's stated financial situation, objectives, and risk tolerance. |
| Transparency | Full disclosure of potential conflicts of interest is required. | More relaxed disclosure requirements, as long as the recommendation is suitable. |
| Due Diligence | Suggestions based on a comprehensive evaluation of the client's financial situation. | Recommendations based on reasonable research and analysis. |
| Ongoing Duty | Ongoing duty to act in the client's best interest, necessitating regular reviews and updates. | Focuses on 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 recommendation remains appropriate. |
| Long-Term Commitment | Financial advisors have a continuous obligation to monitor and update the client's financial plan. | Periodic reviews are advised, but the focus is on the suitability of initial suggestions. |
Benefits of Working with a Fiduciary Financial Advisor in Kansas City, MO
Opting to collaborate with a fiduciary financial advisor in Kansas City, MO brings to the table an array of benefits that can deeply influence your monetary health:
- Fiduciary financial advisers are obligated to act in your best interest and adhere to high standards
- Full disclosure of pertinent materials and facts and complete transparency with issues like risks, fees, and potential conflicts of interest, permitting you to make the optimal decisions for you and your Kansas City, MO family
- Handle investments on your behalf by leveraging their expertise to develop and oversee a diversified portfolio that resonates with your goals and strategies
- Comprehensive financial planning and a well-rounded approach to your financial well-being, taking into account all facets of your financial life to devise a personalized approach
- Ongoing monitoring and advice to ensure your financial tactics and investments continue to be in line and that you can adapt to any unexpected situations the market or life throws your way
- Diminished risk with prudent and responsible investment choices done by meticulously assessing the risk linked with each investment and modifying your portfolio to align with your risk tolerance
- Peace of mind that your best interests are being watched over by skilled financial advisors
- A lasting 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 comprehensive financial planning services are designed to provide you with a holistic approach to achieving your financial goals. Our team of fiduciary financial advisors in St. Louis functions diligently to understand your unique financial situation and customize strategies that match your life aspirations.
Personalized Financial Roadmap
We begin by conducting a thorough analysis of your present financial status, including income, expenses, assets, and liabilities. This helps us formulate a personalized financial roadmap that meets your short-term needs and long-term objectives.
Financial Portfolio Management
We create personalized strategies to balance your portfolio, balancing your risk tolerance with your time horizon. Our team consistently monitors and adjusts your investments to match your financial goals, ensuring that your portfolio remains robust and adaptable to changing market conditions.
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 ensure 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 highly knowledgeable in tax laws and strategies that can reduce your tax liability and boost your overall financial health.
Legacy Planning
We also deliver educated guidance on estate planning to help you protecting 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.
Continuous Oversight
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 deeply client-centric. We pride ourselves on building long-lasting relationships based on trust, transparency, and personalized service. Your financial well-being is our primary priority, and we are devoted to helping you reach your financial goals with integrity and excellence.
Other services we offer in Kansas City, MO include:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Hire Correct Capital as Your Kansas City, MO Fiduciary Financial Advisor
Selecting a financial advisor in Kansas City, MO with a fiduciary standard is vital to ensure 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 prioritize the financial success and peace of mind of Kansas City, MO residents and business owners equally. Our team includes CERTIFIED FINANCIAL PLANNER™ (CFP®) professionals and we are a Registered Investment Advisor (RIA) with the expertise and qualifications essential to guide 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 314-930-401(k) or contact us online to set up an appointment and find out more about how we can assist you reach your financial goals in Kansas City, MO.
