Fiduciary financial advisor in Memphis, TN. For Memphis, TN residents who don't have the 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 vital in that partnership, and whether you're preparing for retirement, looking to manage your wealth, or ensuring a safe financial future for your loved ones, you need a financial advisor who you know will treat you and your money well. By choosing a fiduciary financial advisor in Memphis, TN, you'll have a partner who has a legal and ethical responsibility to put your own best interests first.
At Correct Capital Wealth Management, our Memphis, TN fiduciary financial advisors won't ever recommend a product, investment, or approach that we do not genuinely trust in ourselves. For financial advisors that follow the fiduciary standard and operate with your best interest as their top priority, call Correct Capital now at 314-930-401(k), fill out our online form, or schedule a meeting with a member of our advisor team.
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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 entity that occupies a role of trust and responsibility when managing assets, monetary matters, or legal concerns on behalf of another person. Fiduciaries are legally and ethically obliged to operate 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 include:
- Trustees — People or entities responsible for managing and monitoring assets held in a trust for the benefit of beneficiaries.
- Executors — Individuals appointed to manage the estate and assets of a decedent based on their will or the law.
- Financial advisors — Professionals who offer financial advice and oversee investments for clients, with an responsibility to emphasize the client's financial well-being.
- Corporate directors — Members of a company's board of directors who are entrusted with making decisions in the best interests of the shareholders.
- Guardians — People appointed 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 bound by a fiduciary duty to act in the best interests of their clients when handling legal matters.
- Real estate agents — Professionals who aid 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 vital elements to understanding fiduciary duty:
1. Good Faith
Fiduciaries are mandated to act in "good faith," which means they engage with their clients or beneficiaries honestly, with genuine intention, and without any intention to mislead or damage 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 beneficiary, which means they must prioritize the beneficiary's interests ahead of their own. They ought to steer clear of any conflicts of interest that might compromise their ability to act exclusively in the beneficiary's best interests. Any conflicts of interest must be disclosed to the client or beneficiary and the advisor must still act with the 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 prudent person would employ in the same or similar situations. They must make informed and considered decisions when overseeing assets or making decisions on behalf of their client or beneficiary. This duty ensures that they do their best to protect and increase the assets under their care while mitigating risks.
What Is a Fiduciary Financial Advisor in Memphis, TN?
Financial advisors help Memphis, TN individuals, families, and business owners attain their life goals through a array of financial services and recommendations. These services comprise investment choices, retirement consulting, tax planning, estate planning, portfolio management and more.
Any individual in Memphis, TN can call themselves a "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 need to have qualifications and certifications from industry organizations such as the CFP Board and Fi360. Obtaining and retaining these certifications necessitate persistent education and a rigorous moral standard.
As an example, 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 Memphis, TN Fiduciaries?
Not all financial advisor in Memphis, TN is fiduciaries. The key reason is that financial advisors can function under diverse regulatory frameworks and compensation structures, resulting to divergent standards of care:
- Regulatory framework — Financial advisors can be subject to different regulatory oversight based on their business model. As an example, Registered Investment Advisors (RIAs) are typically fiduciaries. In contrast, some advisors (for example, those falling under a broker-dealer model) function under the suitability standard, which mandates investments to be appropriate 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 often charge a proportional charge for their services, rendering their compensation clear and minimizing conflicts of interest. Non-fiduciary advisors typically receive commissions or different kinds of compensation associated with product sales, which means they could make recommendations that are more in their interest than yours.
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 determine which investments will be profitable ahead of time, but stipulates that a fiduciary financial advisor purchase investments that a reasonable 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 eventually unified with the Uniform Prudent Investor Act. Each state can apply their own unique laws. Missouri law, for example, sets out that fiduciary financial advisors must consider:
- General 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 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 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 merely obligated to recommend investment products or products that align with your objectives, while financial advisors with a fiduciary duty must act in your best interest. Here are some important differences:
Fiduciary Duty
- Legal and Ethical Obligation: Fiduciary financial advisors are legally and ethically obligated to act in their clients' best interests at all times.
- Client's Best Interest: Financial advisors must prioritize the client's financial well-being over their own profit.
- Full Disclosure: They must reveal all conflicts of interest, guarantee transparency, and deliver the highest level 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 recommendations are suitable for the client’s financial needs and objectives at the time of the transaction.
- Reduced Care Standard: Financial advisors can take into account their own interests as long as the suggestions are appropriate.
- Potential Conflicts: Advisors may receive commissions from the sale of financial products, which can create conflicts of interest.
- Governance: Regulated by the Financial Industry Regulatory Authority (FINRA), which requires 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 stipulates 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 managing a client's investments and financial planning:
| Best Interest | Reasonable Belief | |
|---|---|---|
| Definition | Mandates advisors to act in the client's best financial interest. | Demands advisors to recommend suitable 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 proper 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. | Looser disclosure requirements, so long as the suggestion 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 | Unceasing 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 reduced focus on ongoing oversight. |
| Conflict of Interest | Must reveal and manage conflicts openly, ensuring clients are aware of potential biases. | Conflicts are less tightly controlled, as long as the recommendation remains suitable. |
| Long-Term Commitment | Advisors have a continuous obligation to oversee and update the client's financial plan. | Regular reviews are advised, but the focus is on the suitability of initial suggestions. |
Benefits of Working with a Fiduciary Financial Advisor in Memphis, TN
Choosing to partner with a fiduciary financial advisor in Memphis, TN brings to the table an array of benefits that can deeply affect your monetary health:
- Fiduciary financial advisers are obligated to act in your best interest and uphold professional standards
- Total disclosure of relevant materials and facts and complete transparency regarding issues like risks, fees, and potential conflicts of interest, enabling you to make the most informed decisions for you and your Memphis, TN family
- Manage investments on your behalf utilizing their expertise to create and manage a diversified portfolio that resonates with your financial goals and risk tolerance
- Thorough financial planning and a holistic approach to your financial well-being, taking into account all facets of your financial life to create a personalized approach
- Consistent monitoring and guidance to guarantee your financial strategies and investments stay aligned and that you can modify to any unexpected situations the market or life gives your way
- Reduced risk with sensible and judicious investment choices made by carefully assessing the risk associated with each investment and shaping your portfolio to align with your risk tolerance
- Assurance that your best interests are being watched over by experienced financial professionals
- A prolonged relationship with a fiduciary financial advisor that grasps your financial goals change 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 designed to offer you with a holistic approach to achieving your financial goals. Our team of fiduciary financial advisors in St. Louis operates diligently to comprehend your unique financial situation and customize strategies that align with 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 addresses your short-term needs and long-term objectives.
Financial Portfolio Management
We craft personalized strategies to diversify your portfolio, making sure your risk tolerance aligns with your time horizon. Our team continuously monitors and adjusts your investments to align with your financial goals, ensuring that your portfolio remains robust and adaptable as market conditions change.
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 securely and securely.
Tax Planning
Effective tax planning ensures more of your hard-earned money in your pocket and your family. Our advisors are well-versed in tax laws and strategies that can decrease your tax liability and enhance your overall financial health.
Estate Planning
We also offer informed guidance on estate planning to help you safeguarding your legacy. From wills and trusts to estate tax strategies, we ensure your assets are distributed according to your wishes while lowering tax burdens.
Ongoing Monitoring and Adjustments
Financial planning is not a single event but a continuous process. We deliver ongoing monitoring and routine reviews to adapt your financial plan to any shifts in your life circumstances or economic environment.
Client-Focused Strategy
At Correct Capital, our approach is profoundly 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 dedicated to helping you reach your financial goals with integrity and excellence.
Other services we offer in Memphis, TN include:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
- Self-Employed Retirement Plans
Hire Correct Capital as Your Memphis, TN Fiduciary Financial Advisor
Choosing a financial advisor in Memphis, TN with a fiduciary standard is essential to guarantee your long-term interests remain protected. At Correct Capital Wealth Management, we are pleased to be fiduciary financial advisors who hold in high regard the financial success and peace of mind of Memphis, TN 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 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 set up an appointment and learn more about how we can aid you attain your financial goals in Memphis, TN.
