Fiduciary financial advisor in Norfolk, VA. For those in Norfolk, VA who don't have the free time, knowledge, or inclination to oversee their investments and retirement accounts themselves, working with a financial advisor offers peace of mind. Trust is vital in that relationship, and whether you're planning for retirement, seeking to manage your wealth, or saving for your kids' education, the knowledge, skill, and honesty of your financial advisor matter greatly. By working with a fiduciary financial advisor in Norfolk, VA, you'll have a partner who is legally and ethically committed to put your own best interests first.
At Correct Capital Wealth Management, our Norfolk, VA fiduciary financial advisors will never suggest a solution, investment, or approach that we don't sincerely believe in ourselves. For financial advisors that uphold the fiduciary standard and work with your best interest as their top priority, call Correct Capital today at 314-930-401(k), contact us through our wesbite, 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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What Is a Fiduciary?
A fiduciary is a person or organization that maintains a role of trust and responsibility when managing assets, finances, or legal matters on behalf of another. Fiduciaries are legally and ethically bound to operate in the best interests of the person or entity they are serving, often known 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 entities charged with handling and overseeing assets held in a trust for the gain of beneficiaries.
- Executors — People chosen to handle the estate and assets of a deceased person based on their will or the law.
- Financial advisors — Professionals who give financial advice and manage investments for clients, with an duty to put first the client's financial goals.
- Corporate directors — Individuals of a company's board of directors who are bound to shareholders to try and increase their profit.
- Guardians — Individuals designated by the court to make decisions on behalf of minors or persons who are not able 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 handling their cases.
- Real estate agents — Experts who help 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 crucial facets to understanding fiduciary duty:
1. Good Faith
Fiduciaries have an obligation to act in "good faith," which means they interact with their clients or beneficiaries honestly, with sincerity, and without any intention to mislead or infringe upon the interests of their beneficiaries. They must continually act with integrity and with the best interests of the clients as a priority.
2. Duty of Loyalty
Fiduciaries owe a "duty of loyalty" to the beneficiary, which means they must prioritize the beneficiary's interests over their own. They must steer clear of any conflicts of interest that might compromise their capacity to act solely in the beneficiary's best interests. Any conflicts of interest need to be revealed 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 degree of care, skill, and diligence that a judicious person would employ in similar circumstances. They must make well-informed and considered decisions when handling assets or deciding on behalf of their client or beneficiary. This duty guarantees that they strive to protect and expand the assets under their care while reducing risks.
What Is a Fiduciary Financial Advisor in Norfolk, VA?
Financial advisors help Norfolk, VA individuals, families, and business owners attain their life goals as they relate to their finances. These services consist of investment choices, retirement consulting, tax planning, estate planning, portfolio management and others.
Anyone in Norfolk, VA can give themselves the title of "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 keeping these certifications require continuous education and a stringent moral standard.
To illustrate, 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 Norfolk, VA Fiduciaries?
Not all financial advisor in Norfolk, VA is fiduciaries. The primary reason is that financial advisors can operate under diverse regulatory frameworks and compensation structures, leading to varying standards of care:
- Regulatory framework — Financial advisors can be subject to different regulatory oversight depending on their business model. For example, Registered Investment Advisors (RIAs) are typically fiduciaries. Conversely, some advisors (for example, those within a broker-dealer model) function under the suitability standard, which requires recommendations to be suitable for clients but does not mandate the same duties of loyalty and care.
- Compensation structure — The manner financial advisors are compensated can influence their fiduciary status. Fiduciary advisors often charge a percentage fee for their services, rendering their compensation clear and limiting conflicts of interest. Other advisors generally receive commissions or other forms of compensation associated with product sales, which means they might 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 know which investments will be profitable with 100% certainty, but stipulates that a fiduciary financial advisor go for 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 later unified with the Uniform Prudent Investor Act. Each state may apply their own specific laws. Missouri law, for example, stipulates that fiduciary financial advisors must consider:
- General 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 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 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 only required to recommend investment products or 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
- Legal and Ethical Responsibility: Fiduciary financial advisors are lawfully and ethically bound to operate in their clients' best interests at all times.
- Client's Best Interest: Advisors must prioritize the client's financial well-being over their own profit.
- Comprehensive Care: They must disclose all conflicts of interest, ensure transparency, and deliver the highest standard of care in their advice and actions.
- Governance: Regulated 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
- Appropriateness: Financial advisors only 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: Advisors can consider their own interests as long as the recommendations 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 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 act in their clients' "best interest," while FINRA Rule 2111 requires that dealer-brokers and other non-fiduciaries only have a "reasonable basis" for their suggestions. Here's a summary of what those terms mean in relation to handling a client's investments and financial planning:
Best Interest | Reasonable Belief | |
---|---|---|
Definition | Mandates financial advisors to act in the client's best financial interest. | Requires financial advisors to recommend suitable investment products or strategies based on provided information. |
Standard of Care | Higher level of care ensuring every action aligns with the client's best outcome. | Guarantees suggestions are suitable and make sense for the client's circumstances. |
Client-Centric Approach | Advisors prioritize client's goals, needs, and preferences above their own. | Advisors base suggestions on the client's disclosed financial situation, objectives, and risk tolerance. |
Transparency | Full disclosure of potential conflicts of interest is mandated. | More relaxed disclosure requirements, so long as the suggestion is appropriate. |
Due Diligence | Recommendations based on a comprehensive evaluation of the client's financial situation. | Suggestions based on reasonable research and analysis. |
Ongoing Duty | Ongoing duty to act in the client's best interest, necessitating regular reviews and updates. | Focuses on the suitability of advice at the time of the recommendation, with minimal 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 appropriate. |
Long-Term Commitment | Financial advisors have a ongoing obligation to monitor and adjust the client's financial plan. | Regular reviews are recommended, but the focus is on the suitability of initial suggestions. |
Benefits of Working with a Fiduciary Financial Advisor in Norfolk, VA
Opting to collaborate with a fiduciary financial advisor in Norfolk, VA offers an array of benefits that can profoundly affect your fiscal health:
- Fiduciary financial advisers are required to act in your best interest and adhere to professional standards
- Complete disclosure of relevant materials and facts and full transparency concerning issues like risks, fees, and potential conflicts of interest, permitting you to make the most informed decisions for you and your Norfolk, VA family
- Manage investments on your behalf utilizing their expertise to develop 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, evaluating all facets of your financial life to devise a custom approach
- Ongoing monitoring and advice to guarantee your financial plans and investments remain on track and that you can adapt to any unexpected situations the market or life gives your way
- Minimized risk with wise and judicious investment choices taken by meticulously assessing the risk associated with each investment and modifying your portfolio to align with your risk tolerance
- Relief that your best interests are being watched over by knowledgeable financial advisors
- A long-term relationship with a fiduciary financial advisor that understands your financial goals change over time, and life situations change
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 meeting 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 conducting a detailed analysis of your current financial status, including income, expenses, assets, and liabilities. This helps us develop a personalized financial roadmap that addresses your short-term needs and long-term objectives.
Investment Portfolio Management
We craft personalized strategies to diversify your portfolio, balancing your risk tolerance with your time horizon. Our team regularly 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 foundation of our comprehensive financial planning. We assist you in navigating the complexities of retirement accounts, social security benefits, and income strategies to make certain you can retire comfortably and safely.
Tax Planning
Effective tax planning helps keep your hard-earned money with yourself and your family. Our advisors are expert in tax laws and strategies that can reduce your tax liability and enhance your overall financial health.
Legacy Planning
We also offer expert guidance on estate planning to help you protecting your legacy. From wills and trusts to estate tax strategies, we make certain your assets are distributed according to your wishes while reducing tax burdens.
Ongoing Monitoring and Adjustments
Financial planning is not a single event but a ongoing process. We offer ongoing monitoring and periodic reviews to adjust 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 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 devoted to helping you achieve your financial goals with integrity and excellence.
Other services we offer in Norfolk, VA include:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Hire Correct Capital as Your Norfolk, VA Fiduciary Financial Advisor
Choosing a financial advisor in Norfolk, VA with a fiduciary duty is vital to ensure your long-term interests stay protected. 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 Norfolk, VA individuals 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 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.
Get in touch with us today at 314-930-401(k) or contact us through our website to arrange an appointment and find out more about how we can aid you reach your financial goals in Norfolk, VA.