Fiduciary financial advisor in Peoria, AZ. For Peoria, AZ residents who don't have the free time, knowledge, or interest to oversee their investments and retirement accounts themselves, partnering with a financial advisor is a great way to help meet their financial goals. That relationship is built on trust, and whether you're planning for retirement, seeking to grow your wealth, or ensuring a stable financial future for your family, you need a financial advisor who you know will be an honest steward of your assets. By working with a fiduciary financial advisor in Peoria, AZ, you'll have a partner who has a legal and ethical obligation to put your own best interests first.
At Correct Capital Wealth Management, our Peoria, AZ fiduciary financial advisors will never suggest a solution, investment, or plan that we don't genuinely have faith in ourselves. For financial advisors that uphold the fiduciary standard and act with your best interest in mind, reach out to Correct Capital today at 314-930-401(k), contact us online, 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 responsibility when handling assets, finances, or legal matters for someone else. Fiduciaries are legally and ethically bound to act in the best interests of the person or entity they are representing, often known as their "principal" or "beneficiary". This duty of loyalty and duty of care is referred to as the fiduciary standard.
Frequent examples of fiduciaries are:
- Trustees — People or organizations tasked with managing and overseeing assets held in a trust for the advantage of beneficiaries.
- Executors — Individuals chosen to manage the estate and assets of a deceased person as per their will or the law.
- Financial advisors — Professionals who give financial advice and manage investments for clients, with an obligation to emphasize the client's financial well-being.
- Corporate directors — Individuals of a company's board of directors who are given the responsibility of making decisions in the best interests of the shareholders.
- Guardians — People appointed by the court to make decisions on behalf of people under 18 or individuals who are incapable to make decisions for themselves.
- Attorneys — Lawyers who are obligated by a fiduciary duty to work in the best interests of their clients when dealing with their legal affairs.
- Real estate agents — Specialists who assist 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 important elements to understanding fiduciary duty:
1. Good Faith
Fiduciaries are required 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 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 must eschew any conflicts of interest that could jeopardize their capability to act only in the beneficiary's best interests. Any conflicts of interest must 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 level of care, skill, and diligence that a judicious person would employ in the same or similar situations. They must make informed and careful decisions when handling assets or deciding on behalf of their client or beneficiary. This duty guarantees that they work diligently to shield and expand the assets within their care while reducing risks.
What Is a Fiduciary Financial Advisor in Peoria, AZ?
Financial advisors help Peoria, AZ individuals, families, and business owners realize their life goals as they relate to their finances. These services include investment choices, retirement consulting, tax planning, estate planning, asset management and others.
Anyone in Peoria, AZ can label 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 must possess qualifications and certifications from industry organizations such as the CFP Board and Fi360. Achieving and maintaining these certifications necessitate continuous 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 Peoria, AZ Fiduciaries?
Not all financial advisor in Peoria, AZ are fiduciaries. The primary reason lies in the fact that financial advisors can operate under different regulatory frameworks and compensation structures, leading to differentiated standards of care:
- Regulatory framework — Financial advisors might be subject to different regulatory oversight depending on their business model. As an example, Registered Investment Advisors (RIAs) are generally fiduciaries. In contrast, some advisors (for example, those under a broker-dealer model) work under the suitability standard, which requires recommendations 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 affect their fiduciary status. Fiduciary advisors typically charge a proportional charge for their services, making their compensation open and limiting conflicts of interest. Other advisors typically receive commissions or other forms 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 need to abide by the Prudent-Person Rule, also 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 mandates that a fiduciary financial advisor purchase investments that a sensible person would purchase from an acceptable risk based on the client's goals and investment objective.
The prudent person rule is an early common law principle, and was subsequently unified with the Uniform Prudent Investor Act. Each state might apply their own unique laws. Missouri law, for example, stipulates that fiduciary financial advisors must consider:
- Overall economic conditions
- Potential inflation or deflation
- Expected tax implications of investments
- The part that each investment or approach plays within your portfolio
- Expected return and appreciation of capital
- Other assets and resources you own
- Your needs for liquidity, 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 anticipated 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 only obligated to recommend investment products or products that align with your goals, while advisors with a fiduciary duty must act in your best interest. Here are some key differences:
Fiduciary Duty
- Ethical Responsibility: Fiduciary financial advisors are lawfully and ethically obligated to operate in their clients' best interests at all times.
- Best Interest: Financial advisors must focus on the client's financial health over their own profit.
- Full Disclosure: They must reveal all conflicts of interest, ensure transparency, and provide the highest standard of care in their recommendations and actions.
- Regulation: 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: Advisors only need to ensure that their recommendations are appropriate for the client’s financial needs and objectives at the time of the transaction.
- Reduced Care Standard: Financial advisors can consider their own interests as long as the recommendations are appropriate.
- Potential Conflicts: Financial advisors may receive commissions from the sale of financial products, which can create conflicts of interest.
- Regulation: Governed by the Financial Industry Regulatory Authority (FINRA), which mandates a “reasonable basis” that an investment is suitable 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 summary of what those terms mean in relation to managing a client's investments and financial planning:
| Best Interest | Reasonable Belief | |
|---|---|---|
| Definition | Mandates financial advisors to act in the client's best financial interest. | Mandates financial advisors to suggest suitable investment products or strategies based on provided information. |
| Standard of Care | Higher level of care making sure every action conforms with the client's most favorable outcome. | Guarantees suggestions are appropriate and make sense for the client's situation. |
| Client-Centric Approach | Financial advisors prioritize client's objectives, needs, and preferences above their own. | Financial advisors base suggestions on the client's disclosed financial situation, objectives, and risk tolerance. |
| Transparency | Total disclosure of potential conflicts of interest is necessary. | More relaxed disclosure requirements, provided the recommendation is suitable. |
| Due Diligence | Suggestions 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. | Emphasizes the suitability of advice at the time of the recommendation, with less focus on ongoing oversight. |
| Conflict of Interest | Must reveal and handle conflicts transparently, ensuring clients are aware of potential biases. | Conflicts are less strictly regulated, as long as the recommendation remains appropriate. |
| Long-Term Commitment | Financial advisors have a continuous obligation to oversee and update the client's financial plan. | Periodic reviews are recommended, but the focus is on the suitability of initial recommendations. |
Benefits of Working with a Fiduciary Financial Advisor in Peoria, AZ
Choosing to partner with a fiduciary financial advisor in Peoria, AZ brings to the table an array of advantages that can significantly impact your monetary health:
- Fiduciary financial advisers must act in your best interest and uphold ethical standards
- Full disclosure of relevant materials and facts and complete transparency regarding matters like risks, fees, and potential conflicts of interest, permitting you to make the optimal decisions for you and your Peoria, AZ family
- Handle investments on your behalf utilizing their expertise to create and handle a diversified portfolio that aligns with your financial goals and risk tolerance
- Thorough financial planning and a well-rounded approach to your financial well-being, taking into account all facets of your financial life to devise a personalized approach
- Ongoing monitoring and advice to ensure your financial strategies and investments continue to be in line and that you can adapt to any surprises the market or life presents your way
- Reduced risk with wise and judicious investment choices taken by carefully assessing the risk linked with each investment and tailoring your portfolio to match your risk tolerance
- Peace of mind that your best interests are being looked after by skilled financial professionals
- 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 offer you with a holistic approach to achieving your financial goals. Our team of fiduciary financial advisors in St. Louis operates diligently to grasp your unique financial situation and customize strategies that match your life aspirations.
Tailored Financial Roadmap
We begin by undertaking a detailed analysis of your present 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 develop personalized strategies to balance your portfolio, balancing your risk tolerance with your time horizon. Our team consistently monitors and adjusts your investments to match your financial goals, making sure that your portfolio remains robust and adaptable to changing market conditions.
Retirement Strategy
Planning for retirement is a key element of our comprehensive financial planning. We help you navigate the complexities of retirement accounts, social security benefits, and income strategies to ensure you can retire comfortably and safely.
Tax Planning
Effective tax planning ensures more of your hard-earned money in your pocket and your loved ones. Our advisors are expert in tax laws and strategies that can lower your tax liability and boost your overall financial health.
Legacy Planning
We also provide educated guidance on estate planning to help you protecting your legacy. From wills and trusts to estate tax strategies, we guarantee your assets are distributed according to your wishes while reducing tax burdens.
Continuous Oversight
Financial planning is not a once-off event but a continuous process. We offer ongoing monitoring and routine reviews to modify your financial plan to any alterations 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 reach your financial goals with integrity and excellence.
Other services we offer in Peoria, AZ include:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Choose Correct Capital as Your Peoria, AZ Fiduciary Financial Advisor
Choosing a financial advisor in Peoria, AZ with a fiduciary duty is crucial to ensure your money is being put to use how you need it to be. At Correct Capital Wealth Management, we are pleased to be fiduciary financial advisors who prioritize the financial success and peace of mind of Peoria, AZ residents and business owners equally. Our team includes CERTIFIED FINANCIAL PLANNER™ (CFP®) professionals and we are a Registered Investment Advisor (RIA) with the expertise and qualifications essential to guide 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.
Reach out to us today at 314-930-401(k) or contact us online to arrange an appointment and discover how we can help you attain your financial goals in Peoria, AZ.
