Fiduciary financial advisor in Nashville, TN. For Nashville, TN residents who lack 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 crucial in that partnership, and whether you're planning for retirement, seeking to manage your wealth, or saving for your kids' education, you need a financial advisor who you know will be an honest steward of your assets. By working with a fiduciary financial advisor in Nashville, TN, you'll gain a partner who has a legal and ethical obligation to put your own best interests first.
At Correct Capital Wealth Management, our Nashville, TN fiduciary financial advisors will never propose a solution, investment, or strategy that we do not genuinely believe in ourselves. For financial advisors that uphold 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.
What Is a Fiduciary?
A fiduciary is a person or entity that maintains a position of trust and duty when managing assets, monetary matters, or legal affairs on behalf of another person. Fiduciaries are legally and ethically obliged to work in the best interests of the person or entity they are representing, often referred to as their "principal" or "beneficiary". This duty of loyalty and duty of care is called the fiduciary standard.
Typical examples of fiduciaries are:
- Trustees — Individuals or institutions charged with managing and monitoring assets held in a trust for the advantage 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 manage investments for clients, with an duty to prioritize the client's financial goals.
- 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 minors or people who are not able to make decisions for themselves.
- Attorneys — Legal professionals who are obligated by a fiduciary duty to act in the best interests of their clients when dealing with their legal affairs.
- Real estate agents — Specialists who assist clients in purchasing, 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 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 honestly, with sincerity, and without any design to deceive or infringe upon the interests of their beneficiaries. They must continually act with integrity 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 must steer clear of any conflicts of interest that might compromise their capacity to act exclusively in the beneficiary's best interests. All conflicts of interest need to be disclosed 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 apply the standard of care, skill, and diligence that a prudent person would apply in similar circumstances. They must make informed and thoughtful decisions when handling assets or making decisions on behalf of their client. This duty ensures that they do their best to safeguard and increase the assets under their care while reducing risks.
What Is a Fiduciary Financial Advisor in Nashville, TN?
Financial advisors help Nashville, TN individuals, families, and business owners achieve their life goals as they relate to their finances. These services consist of investment recommendations, retirement planning, tax planning, estate planning, asset management and others.
Any person in Nashville, TN 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 must possess accreditations and certifications from industry organizations such as the CFP Board and Fi360. Obtaining and keeping these certifications necessitate ongoing 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 Nashville, TN Fiduciaries?
Not all financial advisor in Nashville, TN is fiduciaries. The key reason lies in the fact that financial advisors can operate under different regulatory frameworks and compensation structures, leading to divergent standards of care:
- Regulatory framework — Financial advisors can be subject to distinct regulatory oversight based on their business model. For example, Registered Investment Advisors (RIAs) are generally fiduciaries. In contrast, some advisors (for example, those falling under a broker-dealer model) operate under the suitability standard, which mandates recommendations to be appropriate for clients but doesn't require the same level of fiduciary duty.
- Compensation structure — The method financial advisors are compensated can influence their fiduciary status. Fiduciary advisors typically charge a percentage fee for their services, making their compensation clear and limiting conflicts of interest. Other advisors typically 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 cannot predict the future or determine which investments will be profitable with 100% certainty, but mandates that a fiduciary financial advisor purchase investments that a prudent person would purchase from 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 may apply their own unique laws. Missouri law, for example, sets out that fiduciary financial advisors must consider:
- Overall economic conditions
- Potential inflation or deflation
- Expected tax consequences of investments
- The role that each investment or strategy plays within your portfolio
- Expected profit and appreciation of capital
- Other assets and resources you own
- 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 operate under the “suitability rule” are merely required to recommend investments or financial products that align with your objectives, while financial advisors with a fiduciary duty must operate in your best interest. Here are some important differences:
Fiduciary Duty
- Ethical Responsibility: Fiduciary financial advisors are lawfully and ethically bound to act in their clients' best interests at all times.
- 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 standard of care in their advice and actions.
- Regulation: 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
- Suitability: Advisors only need to ensure that their suggestions are appropriate for the client’s financial needs and objectives at the time of the transaction.
- Reduced Care Standard: Advisors can take into account their own interests as long as the suggestions are suitable.
- Potential Conflicts: Financial advisors may receive commissions from the sale of financial products, which can create conflicts of interest.
- Regulation: 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 serve in their clients' "best interest," while FINRA Rule 2111 stipulates that dealer-brokers and other non-fiduciaries only have a "reasonable basis" for their suggestions. 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 best financial interest. | Requires advisors to recommend suitable products or strategies based on provided information. |
| Standard of Care | Superior level of care making sure every action conforms with the client's best outcome. | Ensures suggestions are suitable and make sense for the client's circumstances. |
| Client-Centric Approach | Financial advisors prioritize client's objectives, needs, and preferences above their own. | Advisors base suggestions on the client's stated financial situation, objectives, and risk tolerance. |
| Transparency | Total disclosure of potential conflicts of interest is mandated. | Less stringent disclosure requirements, provided the recommendation is proper. |
| Due Diligence | Recommendations based on a comprehensive evaluation of the client's financial situation. | Recommendations based on reasonable research and analysis. |
| Ongoing Duty | Continuous duty to act in the client's best interest, demanding regular reviews and updates. | Emphasizes the appropriateness of advice at the time of the recommendation, with reduced focus on ongoing oversight. |
| Conflict of Interest | Must disclose and manage conflicts openly, ensuring clients are aware of potential biases. | Conflicts are less strictly regulated, as long as the suggestion remains suitable. |
| Long-Term Commitment | Financial advisors have a continuous 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 Nashville, TN
Opting to collaborate with a fiduciary financial advisor in Nashville, TN provides an array of advantages that can significantly influence your fiscal health:
- Fiduciary financial advisers are obligated to act in your best interest and adhere to professional standards
- Total disclosure of relevant materials and facts and complete transparency regarding matters like risks, fees, and potential conflicts of interest, permitting you to make the most informed decisions for you and your Nashville, TN family
- Manage investments on your behalf by leveraging their expertise to create and oversee a diversified portfolio that resonates with your financial goals and risk tolerance
- Thorough financial planning and a full approach to your financial well-being, considering all facets of your financial life to establish a custom approach
- Continuous monitoring and advice to ensure your financial plans and investments stay aligned and that you can adjust to any unexpected situations the market or life throws your way
- Diminished risk with sensible and responsible investment choices taken by carefully assessing the risk associated with each investment and tailoring your portfolio to correspond with your risk tolerance
- Assurance that your best interests are being cared for by knowledgeable financial advisors
- A prolonged relationship with a fiduciary financial advisor that understands your financial goals change over time, and life situations alter
What Financial Planning Services Do Fiduciary Advisors Offer?
At Correct Capital Wealth Management, our holistic financial planning services are designed to provide you with a holistic approach to meeting your financial goals. Our team of fiduciary financial advisors in St. Louis operates diligently to comprehend your unique financial situation and adapt strategies that align with your life aspirations.
Customized Financial Roadmap
We begin by conducting a comprehensive analysis of your current 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 craft personalized strategies to balance your portfolio, making sure your risk tolerance aligns with your time horizon. Our team consistently monitors and adjusts your investments to meet your financial goals, ensuring that your portfolio remains robust and adaptable to changing market conditions.
Retirement Planning
Planning for retirement is a cornerstone of our comprehensive financial planning. We help you navigate the complexities of retirement accounts, social security benefits, and income strategies to make certain you can retire securely and safely.
Tax Planning
Effective tax planning helps keep your hard-earned money with yourself and your loved ones. Our advisors are well-versed in tax laws and strategies that can lower your tax liability and enhance your overall financial health.
Estate Planning
We also offer expert guidance on estate planning to help you protecting your legacy. From wills and trusts to estate tax strategies, we ensure your assets are allocated according to your wishes while lowering tax burdens.
Continuous Oversight
Financial planning is not a once-off event but a continuous process. We provide ongoing monitoring and regular reviews to modify your financial plan to any shifts in your life circumstances or economic environment.
Client-Focused Strategy
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 dedicated to helping you reach your financial goals with integrity and excellence.
Other services we offer in Nashville, TN include:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Choose Correct Capital as Your Nashville, TN Fiduciary Financial Advisor
Selecting a financial advisor in Nashville, TN with a fiduciary standard is crucial to guarantee your long-term interests stay protected. At Correct Capital Wealth Management, we are proud to be fiduciary financial advisors who place at the forefront the financial success and peace of mind of Nashville, TN residents and business owners alike. 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 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.
Contact us today at 314-930-401(k) or contact us through our website to schedule an appointment and discover how we can help you attain your financial goals in Nashville, TN.
