Fiduciary financial advisor in Long Beach, CA. For Long Beach, CA residents who don't have the time, expertise, or inclination to manage their investments and retirement accounts on their own, partnering with a financial advisor provides peace of mind. That relationship is built on trust, and whether you're planning for retirement, looking to increase your wealth, or saving for your kids' education, the knowledge, skill, and integrity of your financial advisor are of utmost importance. By working with a fiduciary financial advisor in Long Beach, CA, you'll have a partner who has a legal and ethical obligation to put your own best interests first.
At Correct Capital Wealth Management, our Long Beach, CA fiduciary financial advisors will never suggest a solution, investment, or plan that we do not truly believe in ourselves. For financial advisors that uphold 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 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 individual or entity that occupies a role of confidence and duty when managing assets, finances, or legal matters on behalf of another person. Fiduciaries are legally and ethically bound to act in the best interests of the person 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.
Common examples of fiduciaries are:
- Trustees — Individuals or organizations responsible for managing and monitoring assets held in a trust for the gain of beneficiaries.
- Executors — People designated to oversee the estate and assets of a deceased person based on their will or the law.
- Financial advisors — Professionals who give financial advice and oversee investments for clients, with an obligation to emphasize the client's financial well-being.
- Corporate directors — Members of a company's board of directors who are given the responsibility of making decisions in the best interests of the shareholders.
- Guardians — People designated by the court to make decisions on behalf of minors or people who are incapable to make decisions for themselves.
- Attorneys — Legal professionals who are committed by a fiduciary duty to operate in the best interests of their clients when dealing with their cases.
- Real estate agents — Specialists 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 aspects to understanding fiduciary duty:
1. Good Faith
Fiduciaries have an obligation to act in "good faith," which means they deal with their clients or beneficiaries honestly, with genuine intention, and without any intention to deceive or damage 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/beneficiary, which means they must put first the beneficiary's interests above their own. They should avoid any conflicts of interest that might jeopardize their capability to act solely in the beneficiary's best interests. All conflicts of interest need to be revealed to the client and the advisor has to still act with the client/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 use in like circumstances. They must make informed and careful decisions when overseeing assets or making decisions on behalf of their client or beneficiary. This duty confirms that they work diligently to shield and grow the assets under their care while reducing risks.
What Is a Fiduciary Financial Advisor in Long Beach, CA?
Financial advisors help Long Beach, CA individuals, families, and business owners realize their life goals via a array of financial services and recommendations. These services comprise investment recommendations, retirement consulting, tax planning, estate planning, portfolio management and more.
Any person in Long Beach, CA can give themselves the title of "financial advisor," but to say that they're 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 accreditations and certifications from industry organizations such as the CFP Board and Fi360. Achieving and keeping these certifications require persistent education and a strict moral standard.
As an example, 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 Long Beach, CA Fiduciaries?
Not all financial advisor in Long Beach, CA is fiduciaries. The key reason is that financial advisors can work under various regulatory frameworks and compensation structures, leading to varying standards of care:
- Regulatory framework — Financial advisors can be subject to various regulatory frameworks relying on their business model. As an example, Registered Investment Advisors (RIAs) are generally fiduciaries. In contrast, some advisors (for example, those falling under a broker-dealer model) function under the suitability standard, which demands investments to be suitable for clients but does not mandate the same duties of loyalty and care.
- Compensation structure — The way financial advisors are compensated may impact their fiduciary status. Fiduciary advisors often charge a proportional charge for their services, rendering their compensation open and minimizing conflicts of interest. Other advisors typically 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, 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 ahead of time, but stipulates that a fiduciary financial advisor purchase investments that a prudent person would purchase based on an acceptable risk in light of the client's goals and investment objective.
The prudent person rule originates 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, stipulates that fiduciary financial advisors must consider:
- General economic conditions
- Possible inflation or deflation
- Expected tax consequences of investments
- The role that each investment or strategy plays within your portfolio
- Expected return and appreciation of capital
- Additional assets and resources you possess
- Your needs for readily available funds, 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 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 rule” are merely required to recommend investments 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
- 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 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 standard 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
- Appropriateness: Advisors merely need to ensure that their suggestions are appropriate 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 recommendations are suitable.
- Possible Conflicts: Advisors may receive commissions from the sale of investment 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 requires that fiduciary advisors must operate in their clients' "best interest," while FINRA Rule 2111 requires that dealer-brokers and other non-fiduciaries only 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. | Requires financial advisors to suggest appropriate investment products or plans based on available information. |
| Standard of Care | Higher level of care making sure every action matches with the client's most favorable outcome. | Guarantees suggestions are suitable and make sense for the client's situation. |
| Client-Centric Approach | Advisors prioritize client's goals, needs, and preferences above their own. | Financial advisors base recommendations on the client's disclosed financial situation, objectives, and risk tolerance. |
| Transparency | Complete disclosure of potential conflicts of interest is mandated. | Less stringent disclosure requirements, as long as the suggestion is proper. |
| 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, demanding regular reviews and updates. | Stresses the suitability of advice at the time of the recommendation, with less focus on ongoing oversight. |
| Conflict of Interest | Must reveal and manage conflicts openly, ensuring clients are aware of potential biases. | Conflicts are less strictly regulated, as long as the recommendation remains appropriate. |
| Long-Term Commitment | Financial advisors have a ongoing obligation to oversee 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 Long Beach, CA
Choosing to partner with a fiduciary financial advisor in Long Beach, CA offers an array of benefits that can profoundly influence your monetary health:
- Fiduciary financial advisers must act in your best interest and adhere to professional standards
- Full disclosure of essential materials and facts and complete transparency regarding issues like risks, fees, and potential conflicts of interest, allowing you to make the best decisions for you and your Long Beach, CA family
- Make investments on your behalf utilizing their expertise to craft and manage a diversified portfolio that matches your goals and strategies
- Complete financial planning and a holistic approach to your financial well-being, taking into account all facets of your financial life to devise a personalized approach
- Ongoing monitoring and direction to ensure your financial plans and investments continue to be in line and that you can adjust to any unexpected situations the market or life throws your way
- Reduced risk with sensible and responsible investment choices done by thoroughly assessing the risk tied to each investment and modifying your portfolio to align with your risk tolerance
- Peace of mind that your best interests are being watched over by knowledgeable financial professionals
- A prolonged relationship with a fiduciary financial advisor that comprehends your financial goals evolve over time, and life conditions change
What Financial Planning Services Do Fiduciary Advisors Offer?
At Correct Capital Wealth Management, our all-encompassing financial planning services are crafted to provide you with a holistic approach to achieving your financial goals. Our team of fiduciary financial advisors in St. Louis functions diligently to grasp your unique financial situation and tailor strategies that match your life aspirations.
Customized Financial Roadmap
We begin by performing a thorough analysis of your present financial status, including income, expenses, assets, and liabilities. This helps us develop a personalized financial roadmap that caters to your short-term needs and long-term objectives.
Investment Portfolio Management
We create personalized strategies to diversify your portfolio, balancing your risk tolerance with your time horizon. Our team regularly monitors and adjusts your investments to align with your financial goals, making sure that your portfolio remains robust and adaptable as market conditions change.
Retirement Strategy
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 make certain you can retire comfortably and securely.
Tax Planning
Effective tax planning ensures more of your hard-earned money with yourself and your loved ones. Our advisors are expert in tax laws and strategies that can reduce your tax liability and boost your overall financial health.
Legacy Planning
We also deliver expert guidance on estate planning to assist you in preserving your legacy. From wills and trusts to estate tax strategies, we guarantee your assets are allocated according to your wishes while lowering tax burdens.
Continuous Oversight
Financial planning is not a one-time event but a continuous process. We provide ongoing monitoring and periodic reviews to adapt your financial plan to any changes in your life circumstances or economic environment.
Client-Centric Approach
At Correct Capital, our approach is deeply client-centric. We take pride in 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 achieve your financial goals with integrity and excellence.
Other services we offer in Long Beach, CA include:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
- Self-Employed Retirement Plans
Choose Correct Capital as Your Long Beach, CA Fiduciary Financial Advisor
Choosing a financial advisor in Long Beach, CA with a fiduciary standard is crucial 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 prioritize the financial success and peace of mind of Long Beach, CA individuals and business owners equally. Our team is comprised of CERTIFIED FINANCIAL PLANNER™ (CFP®) professionals and we are a Registered Investment Advisor (RIA) with the expertise and qualifications needed to lead 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 schedule an appointment and find out more about how we can aid you achieve your financial goals in Long Beach, CA.
