Fiduciary financial advisor in Lakewood, CO. For Lakewood, CO residents who don't have the free time, expertise, or interest to handle their investments and retirement accounts on their own, working with a financial advisor is a great way to help meet their financial goals. That relationship is built on trust, and whether you're preparing 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 Lakewood, CO, you'll have a ally who has a legal and ethical responsibility to put your own best interests first.
At Correct Capital Wealth Management, our Lakewood, CO fiduciary financial advisors won't ever propose a product, investment, or approach that we don't sincerely trust in ourselves. For financial advisors that adhere to the fiduciary standard and act with your best interest as their top priority, get in touch with Correct Capital now at 314-930-401(k), fill out our online form, or schedule a meeting with on of our advisors.
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Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.
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Understanding Fiduciaries
A fiduciary is a person or organization that occupies a role of trust and responsibility when managing 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 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 responsible for managing and overseeing assets held in a trust for the benefit of beneficiaries.
- Executors — Individuals designated to handle the estate and assets of a deceased person as per 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 — Members 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 people under 18 or persons who are not able 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 — Professionals who help clients in purchasing, 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 are mandated to act in "good faith," which means they interact with their clients or beneficiaries with integrity, with sincerity, and without any aim to mislead or infringe upon 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 over their own. They must steer clear of any conflicts of interest that could jeopardize their capacity to act solely in the client's best interests. Any conflicts of interest must be revealed 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 exercise the level of care, skill, and diligence that a wise person would employ in similar circumstances. They must make well-informed and considered decisions when overseeing assets or making decisions on behalf of their client. This duty ensures that they work diligently to shield and expand the assets under their care while mitigating risks.
What Is a Fiduciary Financial Advisor in Lakewood, CO?
Financial advisors help Lakewood, CO individuals, families, and business owners achieve their life goals as they relate to their finances. These services include investment recommendations, retirement planning, tax planning, estate planning, asset management and more.
Any person in Lakewood, CO 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 have to have qualifications and certifications from industry organizations such as the CFP Board and Fi360. Obtaining and retaining these certifications require ongoing education and a stringent moral standard.
To illustrate, fiduciary financial advisors with a CERTIFIED FINANCIAL PLANNER™ certification are required to 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 Lakewood, CO Fiduciaries?
Not all financial advisor in Lakewood, CO is fiduciaries. The key reason lies in the fact that financial advisors can work under diverse regulatory frameworks and compensation structures, leading to divergent standards of care:
- Regulatory framework — Financial advisors can be subject to various regulatory oversight relying on their business model. As an example, Registered Investment Advisors (RIAs) are typically fiduciaries. On the other hand, some advisors (for example, those falling under a broker-dealer model) function under the suitability standard, which mandates advice to be suitable for clients but doesn't require the same duties of loyalty and care.
- Compensation structure — The method financial advisors are compensated may impact their fiduciary status. Fiduciary advisors often charge a proportional charge for their services, making their compensation clear and minimizing conflicts of interest. Non-fiduciary advisors usually receive commissions or different kinds of compensation tied to product sales, which means you can't be sure that their recommendations are 100% for your benefit.
The Prudent-Person Rule
Fiduciary financial advisors must abide by the Prudent-Person Rule, commonly known as the prudent investor rule. The rule acknowledges that financial advisors cannot predict the future or know which investments will be profitable ahead of time, but mandates that a fiduciary financial advisor go for investments that a sensible 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 eventually unified with the Uniform Prudent Investor Act. Each state can apply their own particular laws. Missouri law, for example, stipulates 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 return and appreciation of capital
- Additional assets and resources you possess
- Your needs for liquidity, 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 expected duration of your relationship with the fiduciary financial advisor
Fiduciary Duty vs. Suitability Standard: What’s the Difference?
Advisors who work under the “suitability standard” are only required to suggest investment products or products that align with your goals, while advisors with a fiduciary duty must operate in your best interest. Here are some important differences:
Fiduciary Duty
- Ethical Responsibility: Fiduciary financial advisors are legally and ethically obligated to operate in their clients' best interests at all times.
- Best Interest: Advisors must prioritize the client's financial health over their own profit.
- Comprehensive Care: They must reveal all conflicts of interest, guarantee transparency, and deliver the highest level of care in their recommendations and actions.
- Regulation: Governed 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 appropriate for the client’s financial needs and objectives at the time of the transaction.
- Reduced Care Standard: Financial advisors can consider their own interests as long as the recommendations are appropriate.
- Possible Conflicts: Advisors may receive commissions from the sale of financial 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 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 operate in their clients' "best interest," while FINRA Rule 2111 mandates that dealer-brokers and other non-fiduciaries only have a "reasonable basis" for their suggestions. Here's a summary of what those terms mean in relation to dealing with a client's investments and financial planning:
| Best Interest | Reasonable Belief | |
|---|---|---|
| Definition | Mandates advisors to act in the client's optimal 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 matches with the client's optimal outcome. | Ensures recommendations are suitable and make sense for the client's situation. |
| Client-Centric Approach | Advisors focus on client's goals, needs, and preferences above their own. | Advisors base recommendations on the client's stated financial situation, objectives, and risk tolerance. |
| Transparency | Complete disclosure of potential conflicts of interest is mandated. | 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 reasonable research and analysis. |
| Ongoing Duty | Unceasing duty to act in the client's best interest, necessitating regular reviews and updates. | Stresses the appropriateness of advice at the time of the recommendation, with less focus on ongoing oversight. |
| Conflict of Interest | Must disclose and manage conflicts transparently, ensuring clients are aware of potential biases. | Conflicts are less strictly regulated, as long as the recommendation remains suitable. |
| Long-Term Commitment | Advisors have a ongoing obligation to monitor and update the client's financial plan. | Periodic reviews are recommended, but the focus is on the suitability of initial recommendations. |
Benefits of Working with a Fiduciary Financial Advisor in Lakewood, CO
Deciding to work with a fiduciary financial advisor in Lakewood, CO offers an array of benefits that can deeply impact your fiscal health:
- Fiduciary financial advisers are obligated to act in your best interest and uphold professional standards
- Total disclosure of essential materials and facts and full transparency regarding issues like risks, fees, and potential conflicts of interest, permitting you to make the best decisions for you and your Lakewood, CO family
- Make investments on your behalf utilizing their expertise to create and manage a diversified portfolio that matches your financial goals and risk tolerance
- Comprehensive financial planning and a well-rounded approach to your financial well-being, evaluating all facets of your financial life to create a custom approach
- Consistent monitoring and guidance to guarantee your financial tactics and investments remain on track and that you can modify to any unexpected situations the market or life presents your way
- Diminished risk with wise and responsible investment choices made by carefully assessing the risk associated with each investment and tailoring your portfolio to match your risk tolerance
- Peace of mind that your best interests are being cared for by knowledgeable financial professionals
- A prolonged relationship with a fiduciary financial advisor that grasps your financial goals evolve over time, and life situations alter
What Financial Planning Services Do Fiduciary Advisors Offer?
At Correct Capital Wealth Management, our comprehensive financial planning services are crafted to provide you with a holistic approach to reaching your financial goals. Our team of fiduciary financial advisors in St. Louis functions diligently to comprehend your unique financial situation and adapt strategies that align with your life aspirations.
Personalized Financial Roadmap
We begin by undertaking a thorough analysis of your current financial status, including income, expenses, assets, and liabilities. This helps us formulate a personalized financial roadmap that addresses your short-term needs and long-term objectives.
Investment 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 align with your financial goals, making sure 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 assist you in navigating the complexities of retirement accounts, social security benefits, and income strategies to guarantee you can retire comfortably and securely.
Tax Planning
Effective tax planning ensures more of your hard-earned money out of Uncle Sam's hands. Our advisors are expert in tax laws and strategies that can reduce your tax liability and improve your overall financial health.
Estate Planning
We also deliver informed guidance on estate planning to help you protecting your legacy. From wills and trusts to estate tax strategies, we make certain your assets are allocated according to your wishes while reducing tax burdens.
Continuous Oversight
Financial planning is not a once-off event but a constant process. We provide ongoing monitoring and routine reviews to adjust your financial plan to any alterations in your life circumstances or economic environment.
Client-Centric Approach
At Correct Capital, our approach is highly client-centric. We pride ourselves on building long-lasting relationships based on trust, transparency, and personalized service. Your financial well-being is our highest priority, and we are committed to helping you achieve your financial goals with integrity and excellence.
Other services we offer in Lakewood, CO include:
- Investment Management
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Choose Correct Capital as Your Lakewood, CO Fiduciary Financial Advisor
Selecting a financial advisor in Lakewood, CO with a fiduciary duty is vital to guarantee your long-term interests remain 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 Lakewood, CO residents and business owners alike. Our team includes CERTIFIED FINANCIAL PLANNER™ (CFP®) professionals and we are a Registered Investment Advisor (RIA) with the skills 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 learn more about how we can assist you attain your financial goals in Lakewood, CO.
