Fiduciary financial advisor in Overland Park, KS. For those in Overland Park, KS who lack the time, knowledge, or inclination to manage their investments and retirement accounts on their own, working with a financial advisor is a great way to help meet their financial goals. Trust is vital in that partnership, and whether you're planning for retirement, looking to increase your wealth, or saving for your kids' education, the knowledge, skill, and integrity of your financial advisor matter greatly. By choosing a fiduciary financial advisor in Overland Park, KS, you'll have a partner who is legally and ethically bound to put your own best interests first.
At Correct Capital Wealth Management, our Overland Park, KS fiduciary financial advisors won't ever propose a product, investment, or plan that we don't truly believe in ourselves. For financial advisors that follow the fiduciary standard and operate with your best interest as their top priority, get in touch with Correct Capital today at 314-930-401(k), contact us online, or schedule a meeting with on of our advisors.
Understanding Fiduciaries
A fiduciary is a individual or organization that maintains a position of confidence and duty when handling assets, finances, or legal concerns for someone else. Fiduciaries are legally and ethically committed to act in the best interests of the individual or organization 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 organizations tasked with handling 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 give financial advice and oversee investments for clients, with an responsibility to prioritize the client's financial goals.
- Corporate directors — Individuals of a company's board of directors who are entrusted with making decisions in the best interests of the shareholders.
- Guardians — Individuals appointed by the court to make decisions on behalf of people under 18 or individuals who are not able 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 legal matters.
- Real estate agents — Professionals who aid clients in buying, 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 aspects to understanding fiduciary duty:
1. Good Faith
Fiduciaries are required to act in "good faith," which means they deal with their clients or beneficiaries truthfully, with sincerity, and without any design to mislead 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, which means they must put first the beneficiary's interests ahead of their own. They must eschew any conflicts of interest that could jeopardize their capability to act exclusively in the beneficiary's best interests. All conflicts of interest must be made known to the client and the advisor needs to still act with the client/beneficiary's interest over their own.
3. Duty of Care
Fiduciaries have a "duty of care" to exercise the level of care, skill, and diligence that a wise person would use in similar circumstances. They must make well-informed and considered decisions when handling assets or making decisions on behalf of their client or beneficiary. This duty guarantees that they do their best to shield and increase the assets within their care while minimizing risks.
What Is a Fiduciary Financial Advisor in Overland Park, KS?
Financial advisors help Overland Park, KS individuals, families, and business owners realize their life goals as they relate to their finances. These services comprise investment strategies, retirement planning, tax planning, estate planning, portfolio management and more.
Anyone in Overland Park, KS 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 need to have credentials and certifications from industry organizations such as the CFP Board and Fi360. Obtaining and maintaining these certifications require ongoing education and a stringent moral standard.
For instance, fiduciary financial advisors with a CERTIFIED FINANCIAL PLANNER™ certification must 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 Overland Park, KS Fiduciaries?
Not all financial advisor in Overland Park, KS is fiduciaries. The key reason lies in the fact that financial advisors can operate under diverse regulatory frameworks and compensation structures, resulting to differentiated standards of care:
- Regulatory framework — Financial advisors might be subject to distinct regulatory frameworks depending on their business model. For instance, Registered Investment Advisors (RIAs) are typically fiduciaries. Conversely, some advisors (for example, those within a broker-dealer model) function under the suitability standard, which demands investments to be suitable for clients but does not mandate the same duties of loyalty and care.
- Compensation structure — The method financial advisors are compensated may impact their fiduciary status. Fiduciary advisors typically charge a percentage fee for their services, rendering their compensation open and reducing conflicts of interest. Non-fiduciary advisors typically receive commissions or different kinds of compensation associated with product sales, which means you can't be sure that their recommendations are 100% for your benefit.
The Prudent-Person Rule
Fiduciary financial advisors must abide by the Prudent-Person Rule, also known as the prudent investor rule. The rule acknowledges that financial advisors can't 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 sensible 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 approach plays within your portfolio
- Expected profit and appreciation of capital
- Additional assets and resources you have
- 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 operate under the “suitability standard” are only required to suggest investments or financial products that align with your goals, while financial advisors with a fiduciary duty must act in your best interest. Here are some key differences:
Fiduciary Duty
- Legal and Ethical Responsibility: Fiduciary financial advisors are lawfully and morally bound to act in their clients' best interests at all times.
- Best Interest: 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.
- 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: Financial advisors merely need to ensure that their recommendations are suitable for the client’s financial requirements and objectives at the time of the transaction.
- Reduced Care Standard: Financial advisors can take into account their own interests as long as the recommendations are appropriate.
- Possible Conflicts: Financial advisors may earn commissions from the sale of investment products, which can create conflicts of interest.
- Governance: Governed 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 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 summary of what those terms mean in relation to managing a client's investments and financial planning:
| Best Interest | Reasonable Belief | |
|---|---|---|
| Definition | Demands advisors to act in the client's optimal financial interest. | Mandates financial advisors to suggest suitable products or strategies based on available information. |
| Standard of Care | Superior level of care ensuring every action conforms with the client's most favorable outcome. | Guarantees recommendations are suitable and make sense for the client's circumstances. |
| Client-Centric Approach | Financial advisors focus on client's goals, needs, and preferences above their own. | Advisors base suggestions on the client's disclosed financial situation, objectives, and risk tolerance. |
| Transparency | Total disclosure of potential conflicts of interest is mandated. | Less stringent disclosure requirements, so long as the recommendation is appropriate. |
| Due Diligence | Suggestions based on a comprehensive evaluation of the client's financial situation. | Suggestions based on adequate research and analysis. |
| Ongoing Duty | Continuous duty to act in the client's best interest, demanding regular reviews and updates. | Focuses on the appropriateness of advice at the time of the recommendation, with less 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 appropriate. |
| Long-Term Commitment | Advisors have a ongoing obligation to monitor and adjust the client's financial plan. | Periodic reviews are recommended, but the focus is on the suitability of initial suggestions. |
Benefits of Working with a Fiduciary Financial Advisor in Overland Park, KS
Deciding to work with a fiduciary financial advisor in Overland Park, KS brings to the table an array of benefits that can deeply impact your financial health:
- Fiduciary financial advisers are required to act in your best interest and maintain ethical standards
- Full disclosure of essential materials and facts and full transparency concerning matters like risks, fees, and potential conflicts of interest, permitting you to make the best decisions for you and your Overland Park, KS family
- Handle investments on your behalf by employing their expertise to craft and oversee a diversified portfolio that matches your financial goals and risk tolerance
- Comprehensive financial planning and a holistic approach to your financial well-being, evaluating all facets of your financial life to devise a custom approach
- Consistent monitoring and advice to ensure your financial plans and investments remain on track and that you can modify to any unexpected situations the market or life presents your way
- Reduced risk with prudent and responsible investment choices done by meticulously assessing the risk associated with each investment and shaping your portfolio to match your risk tolerance
- Assurance that your best interests are being watched over by skilled financial professionals
- 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 offer you with a holistic approach to reaching your financial goals. Our team of fiduciary financial advisors in St. Louis works diligently to comprehend your unique financial situation and tailor strategies that match your life aspirations.
Customized Financial Roadmap
We begin by undertaking a comprehensive analysis of your present financial status, including income, expenses, assets, and liabilities. This helps us formulate 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, making sure your risk tolerance aligns with your time horizon. Our team regularly monitors and adjusts your investments to meet 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 assist you in navigating 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 highly knowledgeable in tax laws and strategies that can decrease your tax liability and boost your overall financial health.
Estate Planning
We also deliver 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 allocated according to your wishes while minimizing tax burdens.
Ongoing Monitoring and Adjustments
Financial planning is not a one-time event but a constant process. We deliver ongoing monitoring and periodic reviews to adapt your financial plan to any alterations in your life circumstances or economic environment.
Client-Centric Approach
At Correct Capital, our approach is deeply 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 committed to helping you attain your financial goals with integrity and excellence.
Other services we offer in Overland Park, KS include:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Choose Correct Capital as Your Overland Park, KS Fiduciary Financial Advisor
Selecting a financial advisor in Overland Park, KS with a fiduciary standard is essential to guarantee your long-term interests remain protected. At Correct Capital Wealth Management, we are proud to be fiduciary financial advisors who prioritize the financial success and peace of mind of Overland Park, KS 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 skills and qualifications needed 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.
Get in touch with us now 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 Overland Park, KS.
