Fiduciary financial advisor in Raleigh, NC. For Raleigh, NC residents who don't have the time, expertise, or inclination to manage their assets and retirement accounts themselves, partnering with a financial advisor offers peace of mind. Trust is vital in that relationship, and whether you're preparing for retirement, looking to grow your wealth, or ensuring a secure financial future for your family, the knowledge, skill, and integrity of your financial advisor matter greatly. By working with a fiduciary financial advisor in Raleigh, NC, you'll gain a confidante who is legally and ethically bound to put your own best interests first.
At Correct Capital Wealth Management, our Raleigh, NC fiduciary financial advisors won't ever recommend a solution, investment, or approach that we don't truly believe in ourselves. For financial advisors that follow the fiduciary standard and work with your best interest in mind, call Correct Capital today at 314-930-401(k), contact us online, or schedule a meeting with a member of our advisor team.
Understanding Fiduciaries
A fiduciary is a person or organization that holds a position of confidence and duty when managing assets, monetary matters, or legal matters on behalf of someone else. Fiduciaries are legally and ethically committed to operate 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 known as the fiduciary standard.
Common examples of fiduciaries are:
- Trustees — Individuals or entities tasked with managing and monitoring assets held in a trust for the advantage of beneficiaries.
- Executors — People designated to handle the estate and assets of a decedent as per their will or the law.
- Financial advisors — Professionals who provide financial advice and manage investments for clients, with an responsibility to prioritize the client's financial well-being.
- Corporate directors — Members of a company's board of directors who are entrusted with making decisions in the best interests of the shareholders.
- Guardians — People designated by the court to make decisions on behalf of minors or people who are not able to make decisions for themselves.
- Attorneys — Lawyers who are committed by a fiduciary duty to act in the best interests of their clients when managing their legal affairs.
- Real estate agents — Experts who assist 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 crucial aspects 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 harm the interests of their beneficiaries. They must continually act honestly and with the best interests of the clients as a priority.
2. Duty of Loyalty
Fiduciaries owe a "duty of loyalty" to the client, which means they must prioritize the beneficiary's interests ahead of their own. They ought to steer clear of any conflicts of interest that could impair their capacity to act only in the beneficiary's best interests. Every conflicts of interest need to be revealed to the client or beneficiary and the advisor has 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 employ in similar circumstances. They must make informed and thoughtful decisions when handling assets or making decisions on behalf of their client or beneficiary. This duty confirms that they work diligently to shield and grow the assets within their care while mitigating risks.
What Is a Fiduciary Financial Advisor in Raleigh, NC?
Financial advisors help Raleigh, NC 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, portfolio management and more.
Any person in Raleigh, NC 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 have to have credentials and certifications from industry organizations such as the CFP Board and Fi360. Obtaining and keeping these certifications necessitate persistent education and a stringent moral standard.
For instance, 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 Raleigh, NC Fiduciaries?
Not all financial advisor in Raleigh, NC are fiduciaries. The key reason lies in the fact that financial advisors can function under diverse regulatory frameworks and compensation structures, leading to varying 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. In contrast, some advisors (for example, those under a broker-dealer model) operate under the suitability standard, which demands recommendations to be suitable for clients but doesn't require the same level of fiduciary duty.
- Compensation structure — The way financial advisors are compensated can affect their fiduciary status. Fiduciary advisors typically charge a percentage fee for their services, making their compensation transparent and limiting conflicts of interest. Other advisors usually receive commissions or other forms of compensation linked 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 are required to abide by the Prudent-Person Rule, often known as the prudent investor rule. The rule acknowledges that financial advisors can't predict the future or know which investments will be profitable ahead of time, but mandates that a fiduciary financial advisor go for investments that a reasonable person would purchase considering an acceptable risk based on 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:
- General economic conditions
- Potential inflation or deflation
- Expected tax consequences of investments
- The part that each investment or approach plays within your portfolio
- Expected return and appreciation of capital
- Other assets and resources you have
- 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 expected 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 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 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.
- Best Interest: Financial advisors must prioritize the client's financial well-being over their own profit.
- Full Disclosure: They must disclose all conflicts of interest, ensure transparency, and provide the highest standard of care in their recommendations 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
- Suitability: Advisors only need to ensure that their suggestions are suitable for the client’s financial requirements and objectives at the time of the transaction.
- Lower Standard of Care: Advisors can consider 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.
- Regulation: Regulated by the Financial Industry Regulatory Authority (FINRA), which requires a “reasonable basis” that an investment is suitable for the client.
- Instances: 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 simply 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 recommend suitable products or plans based on provided information. |
| Standard of Care | Elevated level of care making sure every action matches with the client's most favorable outcome. | Ensures suggestions are appropriate and make sense for the client's circumstances. |
| 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. | Less stringent disclosure requirements, as 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 | Unceasing 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 reduced 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 suitable. |
| Long-Term Commitment | Financial advisors have a ongoing obligation to monitor and adjust the client's financial plan. | Regular reviews are suggested, but the focus is on the suitability of initial suggestions. |
Benefits of Working with a Fiduciary Financial Advisor in Raleigh, NC
Opting to collaborate with a fiduciary financial advisor in Raleigh, NC provides an array of benefits that can profoundly influence your financial health:
- Fiduciary financial advisers must act in your best interest and maintain professional standards
- Complete disclosure of essential materials and facts and complete transparency concerning issues like risks, fees, and potential conflicts of interest, allowing you to make the best decisions for you and your Raleigh, NC family
- Make investments on your behalf by leveraging their expertise to create and manage a diversified portfolio that aligns with your goals and strategies
- Thorough financial planning and a holistic approach to your financial well-being, taking into account all facets of your financial life to establish a custom approach
- Consistent monitoring and advice to guarantee your financial tactics and investments remain on track and that you can modify to any unexpected situations the market or life gives your way
- Minimized risk with prudent and accountable investment choices taken by thoroughly assessing the risk linked with each investment and tailoring your portfolio to correspond with your risk tolerance
- Peace of mind that your best interests are being cared for by experienced financial professionals
- A long-term relationship with a fiduciary financial advisor that understands your financial goals shift over time, and life situations alter
What Financial Planning Services Do Fiduciary Advisors Offer?
At Correct Capital Wealth Management, our all-encompassing financial planning services are created 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 adapt strategies that suit your life aspirations.
Tailored Financial Roadmap
We begin by undertaking a comprehensive analysis of your current financial status, including income, expenses, assets, and liabilities. This helps us create a personalized financial roadmap that caters to your short-term needs and long-term objectives.
Financial Portfolio Management
We develop personalized strategies to diversify 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 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 ensure you can retire with ease and safely.
Tax Planning
Effective tax planning helps keep your hard-earned money out of Uncle Sam's hands. 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 educated 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 minimizing tax burdens.
Ongoing Monitoring and Adjustments
Financial planning is not a single event but a constant process. We provide ongoing monitoring and regular reviews to modify your financial plan to any alterations in your life circumstances or economic environment.
Client-Centric Approach
At Correct Capital, our approach is highly client-centric. We take pride in building long-lasting relationships based on trust, transparency, and personalized service. Your financial well-being is our top priority, and we are devoted to helping you reach your financial goals with integrity and excellence.
Other services we offer in Raleigh, NC include:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Hire Correct Capital as Your Raleigh, NC Fiduciary Financial Advisor
Choosing a financial advisor in Raleigh, NC with a fiduciary duty is essential 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 Raleigh, NC individuals and business owners equally. Our team includes 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 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 through our website to schedule an appointment and discover how we can aid you attain your financial goals in Raleigh, NC.
