Fiduciary financial advisor in Lubbock, TX. For Lubbock, TX residents who don't have the free time, knowledge, or interest to handle their assets 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 planning for retirement, seeking to manage your wealth, or ensuring a stable financial future for your loved ones, the knowledge, skill, and honesty of your financial advisor matter greatly. By choosing a fiduciary financial advisor in Lubbock, TX, you'll have a partner who is legally and ethically committed to put your own best interests first.
At Correct Capital Wealth Management, our Lubbock, TX fiduciary financial advisors won't ever recommend a product, investment, or plan that we don't genuinely have faith in ourselves. For financial advisors that adhere to the fiduciary standard and work with your best interest at heart, call Correct Capital now at 314-930-401(k), contact us through our wesbite, or schedule a meeting with on of our advisors.
What Is a Fiduciary?
A fiduciary is a person or organization that holds a position of confidence and duty when overseeing assets, finances, or legal concerns for someone else. Fiduciaries are legally and ethically committed to work in the best interests of the person or organization they are representing, often known as their "principal" or "beneficiary". This duty of loyalty and duty of care is known as the fiduciary standard.
Frequent examples of fiduciaries are:
- Trustees — Individuals or organizations tasked with managing and monitoring assets held in a trust for the benefit of beneficiaries.
- Executors — People appointed to handle 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 put first the client's financial well-being.
- Corporate directors — Representatives of a company's board of directors who are assigned the responsibility of making decisions in the best interests of the shareholders.
- Guardians — People appointed by the court to make decisions on behalf of people under 18 or persons who are unable to make decisions for themselves.
- Attorneys — Legal professionals who are obligated by a fiduciary duty to work in the best interests of their clients when handling their cases.
- Real estate agents — Professionals who assist 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 have an obligation to act in "good faith," which means they deal 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 consistently 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 over their own. They ought to steer clear of any conflicts of interest that might impair their capacity to act exclusively in the client's best interests. Every conflicts of interest need to be revealed 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 the same or similar situations. They must make informed and considered decisions when handling assets or deciding on behalf of their client. This duty guarantees that they do their best to protect and increase the assets within their care while mitigating risks.
What Is a Fiduciary Financial Advisor in Lubbock, TX?
Financial advisors help Lubbock, TX individuals, families, and business owners achieve their life goals as they relate to their finances. These services include investment choices, retirement planning, tax planning, estate planning, asset management and others.
Anyone in Lubbock, TX 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 necessitate ongoing education and a rigorous moral standard.
For instance, fiduciary financial advisors with a CERTIFIED FINANCIAL PLANNER™ certification need to 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 Lubbock, TX Fiduciaries?
Not all financial advisor in Lubbock, TX are fiduciaries. The main reason is that financial advisors can function under various regulatory frameworks and compensation structures, leading to differentiated 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 generally fiduciaries. Conversely, some advisors (for example, those falling under a broker-dealer model) work under the suitability standard, which requires investments to be appropriate for clients but does not mandate the same duties of loyalty and care.
- Compensation structure — The way financial advisors are compensated can influence their fiduciary status. Fiduciary advisors typically charge a percentage fee for their services, making their compensation open and reducing conflicts of interest. Other advisors usually receive commissions or other forms 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 need to 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 determine which investments will be profitable ahead of time, but stipulates that a fiduciary financial advisor go for investments that a sensible person would purchase considering an acceptable risk considering 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 unique laws. Missouri law, for example, mandates that fiduciary financial advisors must consider:
- Overall economic conditions
- Possible inflation or deflation
- Expected tax implications of investments
- The role that each investment or strategy plays within your portfolio
- Expected profit and appreciation of capital
- Additional assets and resources you own
- 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 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 standard” are merely required to recommend investments or products that match your objectives, while financial advisors with a fiduciary duty must act in your best interest. Here are some important differences:
Fiduciary Duty
- Legal Obligation: Fiduciary financial advisors are lawfully and ethically obligated to act in their clients' best interests at all times.
- 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, guarantee transparency, and provide the highest level of care in their advice and actions.
- Governance: 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: Advisors only need to ensure that their suggestions are appropriate for the client’s financial requirements and objectives at the time of the transaction.
- Reduced Care Standard: Financial advisors can consider their own interests as long as the suggestions are suitable.
- Possible Conflicts: Advisors may receive commissions from the sale of investment products, which can create conflicts of interest.
- Regulation: Regulated 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 mandates that fiduciary advisors must serve in their clients' "best interest," while FINRA Rule 2111 mandates 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 advisors to act in the client's most favorable financial interest. | Requires financial advisors to recommend appropriate investment products or strategies based on provided information. |
| Standard of Care | Superior level of care ensuring every action matches with the client's optimal outcome. | Makes certain 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 suggestions on the client's disclosed financial situation, objectives, and risk tolerance. |
| Transparency | Total disclosure of potential conflicts of interest is required. | Less stringent disclosure requirements, as long as the suggestion is proper. |
| Due Diligence | Suggestions based on a comprehensive evaluation of the client's financial situation. | Suggestions based on adequate research and analysis. |
| Ongoing Duty | Unceasing duty to act in the client's best interest, necessitating regular reviews and updates. | Emphasizes the suitability of advice at the time of the recommendation, with reduced focus on ongoing oversight. |
| Conflict of Interest | Must reveal 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 | Advisors have a continuous obligation to monitor and update 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 Lubbock, TX
Opting to collaborate with a fiduciary financial advisor in Lubbock, TX offers an array of advantages that can profoundly influence your monetary health:
- Fiduciary financial advisers are required to act in your best interest and adhere to ethical standards
- Total disclosure of relevant materials and facts and complete transparency with issues like risks, fees, and potential conflicts of interest, enabling you to make the best decisions for you and your Lubbock, TX family
- Make investments on your behalf by leveraging their expertise to create and handle a diversified portfolio that aligns with your goals and strategies
- Comprehensive financial planning and a full approach to your financial well-being, taking into account all facets of your financial life to devise a tailored approach
- Ongoing monitoring and guidance to ensure your financial tactics and investments remain on track and that you can modify to any surprises the market or life gives your way
- Reduced risk with prudent and accountable investment choices taken by carefully assessing the risk tied to each investment and shaping your portfolio to correspond 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 grasps your financial goals evolve over time, and life situations modify
What Financial Planning Services Do Fiduciary Advisors Offer?
At Correct Capital Wealth Management, our holistic 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 operates diligently to grasp your unique financial situation and customize strategies that suit your life aspirations.
Tailored Financial Roadmap
We begin by performing a thorough analysis of your current financial status, including income, expenses, assets, and liabilities. This helps us create a personalized financial roadmap that meets your short-term needs and long-term objectives.
Investment Portfolio Management
We develop personalized strategies to balance your portfolio, balancing your risk tolerance with your time horizon. Our team continuously monitors and adjusts your investments to match your financial goals, making sure that your portfolio remains robust and adaptable as market conditions change.
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 make certain you can retire with ease and safely.
Tax Planning
Effective tax planning ensures more of your hard-earned money out of Uncle Sam's hands. Our advisors are well-versed in tax laws and strategies that can lower your tax liability and enhance your overall financial health.
Legacy Planning
We also provide educated 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 passed on according to your wishes while reducing tax burdens.
Continuous Oversight
Financial planning is not a single event but a continuous process. We provide ongoing monitoring and periodic reviews to adapt your financial plan to any shifts 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 primary priority, and we are dedicated to helping you attain your financial goals with integrity and excellence.
Other services we offer in Lubbock, TX include:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Hire Correct Capital as Your Lubbock, TX Fiduciary Financial Advisor
Selecting a financial advisor in Lubbock, TX 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 place at the forefront the financial success and peace of mind of Lubbock, TX individuals 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 provide all our clients our I.O.U promise: all of our advice will be independent, objective, and unbiased.
Reach out to us now at 314-930-401(k) or contact us online to arrange an appointment and learn more about how we can help you reach your financial goals in Lubbock, TX.
