Fiduciary financial advisor in Newark, NJ. For those in Newark, NJ who don't have the free time, knowledge, or inclination to oversee their assets and retirement accounts on their own, working with a financial advisor offers peace of mind. Trust is paramount in that partnership, and whether you're planning for retirement, seeking to grow your wealth, or ensuring a secure financial future for your family, you need a financial advisor who you know will treat you and your money well. By choosing a fiduciary financial advisor in Newark, NJ, you'll have a partner who is legally and ethically obliged to put your own best interests first.
At Correct Capital Wealth Management, our Newark, NJ fiduciary financial advisors will never propose a product, investment, or approach that we don't genuinely believe in ourselves. For financial advisors that follow the fiduciary standard and work with your best interest as their top priority, reach out to Correct Capital today at 314-930-401(k), contact us online, or schedule an appointment with a member of our advisor team.
Schedule a Meeting With an Advisor Today
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.
Schedule a 15-Minute Introductory Call
More From Correct Capital Wealth Management
Explore how Correct Capital Wealth Management can help guide you toward smarter decisions, clearer goals, and lasting financial success.
Subscribe To Our Newsletter Listen To Our Podcast Watch Our YouTube Channel
What Is a Fiduciary?
A fiduciary is a individual or organization that occupies a role of confidence and duty when managing assets, finances, or legal affairs for another person. Fiduciaries are legally and ethically committed to operate in the best interests of the individual or organization they are serving, often known as their "principal" or "beneficiary". This duty of loyalty and duty of care is called the fiduciary standard.
Common examples of fiduciaries are:
- Trustees — People or organizations charged with handling and overseeing assets held in a trust for the advantage of beneficiaries.
- Executors — Individuals chosen to oversee the estate and assets of a deceased person according to their will or the law.
- Financial advisors — Professionals who provide financial advice and handle investments for clients, with an duty to put first the client's financial goals.
- Corporate directors — Representatives of a company's board of directors who are bound to shareholders to try and increase their profit.
- Guardians — Individuals chosen 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 legal matters.
- 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 vital facets to understanding fiduciary duty:
1. Good Faith
Fiduciaries have an obligation to act in "good faith," which means they engage with their clients or beneficiaries with integrity, with sincerity, and without any design to deceive or infringe upon the interests of their beneficiaries. They must consistently 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 above their own. They should eschew any conflicts of interest that might impair their capacity to act exclusively in the beneficiary's best interests. All conflicts of interest need to be revealed to the client and the advisor must still act with the client/beneficiary's interest above their own.
3. Duty of Care
Fiduciaries have a "duty of care" to apply the degree of care, skill, and diligence that a judicious person would use in the same or similar situations. They must make well-informed and careful decisions when managing assets or making decisions on behalf of their client or beneficiary. This duty guarantees that they do their best to safeguard and expand the assets under their care while reducing risks.
What Is a Fiduciary Financial Advisor in Newark, NJ?
Financial advisors help Newark, NJ individuals, families, and business owners attain their life goals by means of a range of financial services and recommendations. These services comprise investment strategies, retirement consulting, tax planning, estate planning, portfolio management and others.
Any individual in Newark, NJ can call 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 need to have credentials and certifications from industry organizations such as the CFP Board and Fi360. Securing and retaining these certifications require continuous education and a strict moral standard.
As an example, fiduciary financial advisors with a CERTIFIED FINANCIAL PLANNER™ certification must 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 Newark, NJ Fiduciaries?
Not all financial advisor in Newark, NJ are fiduciaries. The primary reason lies in the fact that financial advisors can function under various regulatory frameworks and compensation structures, resulting to varying standards of care:
- Regulatory framework — Financial advisors can be subject to various regulatory oversight based on their business model. As an example, Registered Investment Advisors (RIAs) are usually fiduciaries. On the other hand, some advisors (for example, those under a broker-dealer model) function under the suitability standard, which mandates 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 can influence their fiduciary status. Fiduciary advisors typically charge a percentage fee for their services, making their compensation open and reducing conflicts of interest. Non-fiduciary 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, 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 sensible 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 later unified with the Uniform Prudent Investor Act. Each state can apply their own particular laws. Missouri law, for example, mandates that fiduciary financial advisors must consider:
- Overall economic conditions
- Potential inflation or deflation
- Expected tax consequences of investments
- The role that each investment or course of action plays within your portfolio
- Expected profit and appreciation of capital
- Additional assets and resources you possess
- 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 work under the “suitability rule” are merely required to suggest 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
- Ethical Responsibility: Fiduciary financial advisors are legally and ethically bound to operate in their clients' best interests at all times.
- Best Interest: Financial advisors must prioritize the client's financial health over their own profit.
- Comprehensive Care: They must reveal all conflicts of interest, guarantee 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.
- Reduced Care Standard: Advisors can consider their own interests as long as the recommendations are appropriate.
- Possible Conflicts: Financial advisors may receive commissions from the sale of financial products, which can create conflicts of interest.
- Governance: Governed 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 act 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 managing a client's investments and financial planning:
| Best Interest | Reasonable Belief | |
|---|---|---|
| Definition | Requires financial advisors to act in the client's most favorable financial interest. | Demands financial advisors to suggest appropriate products or plans based on provided information. |
| Standard of Care | Elevated level of care ensuring every action aligns with the client's best outcome. | Ensures suggestions are appropriate 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 suggestions on the client's stated financial situation, objectives, and risk tolerance. |
| Transparency | Full disclosure of potential conflicts of interest is required. | Looser disclosure requirements, provided the recommendation is suitable. |
| 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, demanding regular reviews and updates. | Focuses on the suitability of advice at the time of the recommendation, with reduced focus on ongoing oversight. |
| Conflict of Interest | Must reveal and handle conflicts transparently, 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 monitor and update the client's financial plan. | Periodic reviews are suggested, but the focus is on the suitability of initial suggestions. |
Benefits of Working with a Fiduciary Financial Advisor in Newark, NJ
Deciding to work with a fiduciary financial advisor in Newark, NJ provides an array of advantages that can significantly influence your monetary health:
- Fiduciary financial advisers must act in your best interest and adhere to high standards
- Total disclosure of essential materials and facts and complete transparency regarding issues like risks, fees, and potential conflicts of interest, permitting you to make the best decisions for you and your Newark, NJ family
- Manage investments on your behalf by employing their expertise to develop and handle a diversified portfolio that matches your financial goals and risk tolerance
- Complete financial planning and a holistic approach to your financial well-being, considering all facets of your financial life to create a personalized approach
- Consistent monitoring and advice to guarantee your financial tactics and investments continue to be in line and that you can adapt to any surprises the market or life presents your way
- Diminished risk with prudent and responsible investment choices taken by thoroughly assessing the risk associated with each investment and tailoring your portfolio to align with your risk tolerance
- Peace of mind that your best interests are being watched over by experienced financial advisors
- A lasting relationship with a fiduciary financial advisor that comprehends your financial goals evolve 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 crafted to offer you with a holistic approach to meeting your financial goals. Our team of fiduciary financial advisors in St. Louis functions diligently to understand your unique financial situation and customize strategies that suit 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 create a personalized financial roadmap that addresses your short-term needs and long-term objectives.
Financial Portfolio Management
We create 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 match 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 assist you in navigating the complexities of retirement accounts, social security benefits, and income strategies to ensure you can retire securely and with confidence.
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 lower your tax liability and boost your overall financial health.
Estate Planning
We also provide informed 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 constant process. We provide ongoing monitoring and regular reviews to adjust your financial plan to any shifts in your life circumstances or economic environment.
Client-Centric Approach
At Correct Capital, our approach is profoundly 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 attain your financial goals with integrity and excellence.
Other services we offer in Newark, NJ include:
- Investment Management
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Choose Correct Capital as Your Newark, NJ Fiduciary Financial Advisor
Selecting a financial advisor in Newark, NJ with a fiduciary standard is vital to ensure 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 hold in high regard the financial success and peace of mind of Newark, NJ residents and business owners alike. Our team includes 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 provide 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 help you achieve your financial goals in Newark, NJ.
