Fiduciary financial advisor in Tacoma, WA. For Tacoma, WA residents who don't have the free time, skill, or inclination to manage their assets and retirement accounts themselves, working with a financial advisor provides peace of mind. That relationship is built on trust, and whether you're planning for retirement, looking to increase 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 Tacoma, WA, you'll gain a partner who is legally and ethically bound to put your own best interests first.
At Correct Capital Wealth Management, our Tacoma, WA fiduciary financial advisors will never suggest a solution, investment, or approach that we do not genuinely have faith in ourselves. For financial advisors that uphold the fiduciary standard and work with your best interest in mind, 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.
What Is a Fiduciary?
A fiduciary is a individual or entity that occupies a role of trust and duty when overseeing assets, finances, or legal affairs on behalf of another person. Fiduciaries are legally and ethically bound to operate in the best interests of the person 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.
Common examples of fiduciaries include:
- Trustees — People or organizations tasked with handling and monitoring assets held in a trust for the benefit of beneficiaries.
- Executors — People appointed to manage the estate and assets of a decedent based on their will or the law.
- Financial advisors — Professionals who give financial advice and manage investments for clients, with an responsibility to prioritize the client's financial well-being.
- Corporate directors — Individuals of a company's board of directors who are assigned the responsibility of making decisions in the best interests of the shareholders.
- Guardians — People appointed by the court to make decisions on behalf of underage individuals or people who are not able to make decisions for themselves.
- Attorneys — Legal professionals who are obligated by a fiduciary duty to operate in the best interests of their clients when handling 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 crucial elements to understanding fiduciary duty:
1. Good Faith
Fiduciaries have an obligation to act in "good faith," which means they deal with their clients or beneficiaries with integrity, with genuine intention, and without any intention to deceive or damage the interests of their beneficiaries. They must continually 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 beneficiary, which means they must prioritize the beneficiary's interests above their own. They must steer clear of any conflicts of interest that could compromise their capability to act solely in the client's best interests. All conflicts of interest must be disclosed to the client and the advisor must 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 prudent person would employ in like circumstances. They must make well-informed and thoughtful decisions when managing assets or deciding on behalf of their client. This duty guarantees that they strive to protect and grow the assets under their care while minimizing risks.
What Is a Fiduciary Financial Advisor in Tacoma, WA?
Financial advisors help Tacoma, WA individuals, families, and business owners attain their life goals by means of a variety of financial services and suggestions. These services comprise investment choices, retirement planning, tax planning, estate planning, portfolio management and others.
Anyone in Tacoma, WA 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 have to have credentials and certifications from industry organizations such as the CFP Board and Fi360. Obtaining and maintaining these certifications demand persistent education and a stringent moral standard.
To illustrate, 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 Tacoma, WA Fiduciaries?
Not all financial advisor in Tacoma, WA are fiduciaries. The primary reason is that financial advisors can work under various regulatory frameworks and compensation structures, leading to divergent standards of care:
- Regulatory framework — Financial advisors might be subject to distinct regulatory oversight depending on their business model. For example, Registered Investment Advisors (RIAs) are typically fiduciaries. In contrast, some advisors (for example, those falling under a broker-dealer model) function under the suitability standard, which demands advice to be fitting for clients but doesn't require the same level of fiduciary duty.
- Compensation structure — The manner financial advisors are compensated can affect their fiduciary status. Fiduciary advisors often charge a proportional charge for their services, rendering their compensation transparent and minimizing conflicts of interest. Non-fiduciary advisors typically 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, also 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 mandates that a fiduciary financial advisor select investments that a prudent 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 may apply their own specific laws. Missouri law, for example, mandates that fiduciary financial advisors must consider:
- General economic conditions
- Possible inflation or deflation
- Expected tax implications of investments
- The part that each investment or approach plays within your portfolio
- Expected profit and appreciation of capital
- Other assets and resources you have
- Your needs for readily available funds, income, and preservation of capital
- An asset's unique 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 standard” are only required to recommend investments or products that match your goals, while 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 morally obligated to act in their clients' best interests at all times.
- Client's Best Interest: Advisors must focus on the client's financial health over their own profit.
- Comprehensive Care: They must reveal 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 recommendations are suitable for the client’s financial requirements and objectives at the time of the transaction.
- Lower Standard of Care: Financial advisors can consider their own interests as long as the recommendations are suitable.
- Potential 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 mandates 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 mandates 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 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 suggest suitable investment products or plans based on provided information. |
| Standard of Care | Higher level of care making sure every action matches with the client's most favorable outcome. | Makes certain suggestions are proper and make sense for the client's circumstances. |
| Client-Centric Approach | Financial advisors prioritize client's objectives, needs, and preferences above their own. | Advisors base recommendations on the client's stated financial situation, objectives, and risk tolerance. |
| Transparency | Complete disclosure of potential conflicts of interest is necessary. | Looser disclosure requirements, so long as the recommendation is proper. |
| Due Diligence | Suggestions based on a comprehensive evaluation of the client's financial situation. | Recommendations based on adequate research and analysis. |
| Ongoing Duty | Ongoing duty to act in the client's best interest, requiring regular reviews and updates. | Emphasizes the suitability of advice at the time of the recommendation, with minimal focus on ongoing oversight. |
| Conflict of Interest | Must disclose and handle conflicts transparently, ensuring clients are aware of potential biases. | Conflicts are more loosely governed, as long as the suggestion remains suitable. |
| Long-Term Commitment | Financial advisors have a ongoing obligation to oversee 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 Tacoma, WA
Choosing to partner with a fiduciary financial advisor in Tacoma, WA brings to the table an array of benefits that can deeply influence your financial health:
- Fiduciary financial advisers must act in your best interest and uphold ethical standards
- Complete disclosure of essential materials and facts and full transparency regarding matters like risks, fees, and potential conflicts of interest, allowing you to make the most informed decisions for you and your Tacoma, WA family
- Make investments on your behalf utilizing their expertise to craft and manage a diversified portfolio that resonates with your financial goals and risk tolerance
- Complete financial planning and a well-rounded approach to your financial well-being, evaluating all facets of your financial life to establish a tailored approach
- Ongoing monitoring and advice to guarantee your financial tactics and investments continue to be in line and that you can modify to any curveballs the market or life presents your way
- Diminished risk with wise and judicious investment choices taken by thoroughly assessing the risk associated with each investment and modifying your portfolio to correspond with your risk tolerance
- Assurance that your best interests are being watched over by skilled financial professionals
- A long-term relationship with a fiduciary financial advisor that comprehends your financial goals evolve over time, and life conditions change
What Financial Planning Services Do Fiduciary Advisors Offer?
At Correct Capital Wealth Management, our comprehensive financial planning services are created to offer 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 undertaking a detailed analysis of your present financial status, including income, expenses, assets, and liabilities. This helps us create a personalized financial roadmap that meets your short-term needs and long-term objectives.
Investment Portfolio Management
We develop personalized strategies to balance 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, ensuring 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 securely and safely.
Tax Planning
Effective tax planning ensures more of your hard-earned money out of Uncle Sam's hands. Our advisors are highly knowledgeable in tax laws and strategies that can lower your tax liability and improve your overall financial health.
Legacy Planning
We also offer expert guidance on estate planning to help you preserving your legacy. From wills and trusts to estate tax strategies, we ensure your assets are passed on according to your wishes while reducing tax burdens.
Ongoing Monitoring and Adjustments
Financial planning is not a one-time event but a constant process. We deliver ongoing monitoring and routine 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 highly client-centric. We take pride in building enduring relationships based on trust, transparency, and personalized service. Your financial well-being is our top priority, and we are committed to helping you reach your financial goals with integrity and excellence.
Other services we offer in Tacoma, WA include:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Hire Correct Capital as Your Tacoma, WA Fiduciary Financial Advisor
Selecting a financial advisor in Tacoma, WA with a fiduciary duty is crucial to guarantee 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 Tacoma, WA residents 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 essential 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 through our website to arrange an appointment and discover how we can help you attain your financial goals in Tacoma, WA.
