Fiduciary financial advisor in Tempe, AZ. For those in Tempe, AZ who lack the free time, expertise, or inclination to manage their assets and retirement accounts on their own, partnering with a financial advisor provides peace of mind. Trust is vital in that relationship, and whether you're preparing for retirement, looking to grow your wealth, or saving for your kids' education, the knowledge, skill, and honesty of your financial advisor matter greatly. By choosing a fiduciary financial advisor in Tempe, AZ, you'll have a confidante who has a legal and ethical responsibility to put your own best interests first.
At Correct Capital Wealth Management, our Tempe, AZ fiduciary financial advisors won't ever suggest a solution, investment, or approach that we don't genuinely trust in ourselves. For financial advisors that adhere to the fiduciary standard and work with your best interest at heart, call Correct Capital today at 314-930-401(k), contact us online, 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 confidence and responsibility when overseeing assets, monetary matters, or legal affairs for someone else. Fiduciaries are legally and ethically committed 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 known as the fiduciary standard.
Frequent examples of fiduciaries are:
- Trustees — People or institutions responsible for handling and overseeing assets held in a trust for the gain of beneficiaries.
- Executors — Individuals designated to manage the estate and assets of a deceased person based on their will or the law.
- Financial advisors — Professionals who offer financial advice and manage investments for clients, with an responsibility to put first the client's financial well-being.
- Corporate directors — Members of a company's board of directors who are given making decisions in the best interests of the shareholders.
- Guardians — People designated by the court to make decisions on behalf of underage individuals or persons who are not able to make decisions for themselves.
- Attorneys — Legal professionals who are committed by a fiduciary duty to work in the best interests of their clients when managing legal matters.
- Real estate agents — Professionals who aid 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 aspects 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 truthfully, with genuine intention, and without any aim to deceive or damage 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 client/beneficiary, which means they must prioritize the beneficiary's interests over their own. They must eschew any conflicts of interest that might jeopardize their capacity to act exclusively in the beneficiary's best interests. Any conflicts of interest need to be revealed to the client or beneficiary and the advisor needs to still act with the beneficiary's interest over their own.
3. Duty of Care
Fiduciaries have a "duty of care" to employ the standard of care, skill, and diligence that a judicious person would use in the same or similar situations. They must make well-informed and careful decisions when managing assets or deciding on behalf of their client or beneficiary. This duty guarantees that they do their best to safeguard and grow the assets under their care while minimizing risks.
What Is a Fiduciary Financial Advisor in Tempe, AZ?
Financial advisors help Tempe, AZ individuals, families, and business owners realize their life goals through a variety of financial services and recommendations. These services comprise investment choices, retirement consulting, tax planning, estate planning, asset management and others.
Anyone in Tempe, AZ 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 need to have credentials and certifications from industry organizations such as the CFP Board and Fi360. Obtaining and retaining these certifications demand continuous education and a stringent moral standard.
As an example, 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 Tempe, AZ Fiduciaries?
Not all financial advisor in Tempe, AZ is fiduciaries. The main reason lies in the fact that financial advisors can work under different regulatory frameworks and compensation structures, resulting to divergent standards of care:
- Regulatory framework — Financial advisors might be subject to different regulatory frameworks depending on their business model. As an example, Registered Investment Advisors (RIAs) are typically fiduciaries. Conversely, some advisors (for example, those falling under a broker-dealer model) operate under the suitability standard, which demands strategies to be fitting 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 usually charge a proportional charge for their services, rendering their compensation transparent and minimizing conflicts of interest. Other advisors usually receive commissions or different kinds of compensation tied to product sales, which means they might make recommendations that are more in their interest than yours.
The Prudent-Person Rule
Fiduciary financial advisors need to abide by the Prudent-Person Rule, often known as the prudent investor rule. The rule acknowledges that financial advisors cannot predict the future or determine which investments will be profitable with 100% certainty, but stipulates that a fiduciary financial advisor go for investments that a prudent person would purchase considering an acceptable risk in light of the client's goals and investment objective.
The prudent person rule originates in common law, and was eventually 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
- 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 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 obligated to suggest investments or financial products that align with your goals, while advisors with a fiduciary duty must act in your best interest. Here are some important differences:
Fiduciary Duty
- Legal Obligation: Fiduciary financial advisors are lawfully and ethically bound to operate in their clients' best interests at all times.
- Best Interest: Advisors must focus on the client's financial well-being over their own profit.
- Full Disclosure: They must reveal all conflicts of interest, guarantee transparency, and provide the highest level of care in their recommendations and actions.
- Governance: Governed 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
- Appropriateness: Advisors only need to ensure that their suggestions 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.
- Possible Conflicts: Financial advisors may earn 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.
- Instances: 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 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 | Requires advisors to act in the client's optimal financial interest. | Demands advisors to recommend suitable investment products or plans based on provided information. |
Standard of Care | Higher level of care ensuring every action conforms with the client's optimal outcome. | Ensures suggestions are appropriate and make sense for the client's situation. |
Client-Centric Approach | 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 | Total disclosure of potential conflicts of interest is mandated. | Looser disclosure requirements, as long as the suggestion is proper. |
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, demanding regular reviews and updates. | Emphasizes the appropriateness of advice at the time of the recommendation, with less focus on ongoing oversight. |
Conflict of Interest | Must disclose and handle conflicts openly, ensuring clients are aware of potential biases. | Conflicts are less strictly regulated, as long as the recommendation remains appropriate. |
Long-Term Commitment | Advisors have a ongoing obligation to oversee and adjust the client's financial plan. | Periodic reviews are advised, but the focus is on the suitability of initial recommendations. |
Benefits of Working with a Fiduciary Financial Advisor in Tempe, AZ
Deciding to work with a fiduciary financial advisor in Tempe, AZ offers an array of benefits that can significantly impact your financial health:
- Fiduciary financial advisers are required to act in your best interest and maintain ethical standards
- Full disclosure of relevant materials and facts and complete transparency with issues like risks, fees, and potential conflicts of interest, allowing you to make the best decisions for you and your Tempe, AZ family
- Manage investments on your behalf utilizing their expertise to craft and manage a diversified portfolio that resonates with your financial goals and risk tolerance
- Thorough financial planning and a full approach to your financial well-being, evaluating all facets of your financial life to create a personalized approach
- Ongoing monitoring and advice to ensure your financial strategies and investments stay aligned and that you can adapt to any curveballs the market or life gives your way
- Reduced risk with wise and accountable investment choices done by carefully assessing the risk tied to each investment and shaping your portfolio to align with your risk tolerance
- Peace of mind that your best interests are being cared for by experienced financial professionals
- A prolonged relationship with a fiduciary financial advisor that understands your financial goals change over time, and life scenarios modify
What Financial Planning Services Do Fiduciary Advisors Offer?
At Correct Capital Wealth Management, our holistic financial planning services are designed to provide you with a holistic approach to achieving your financial goals. Our team of fiduciary financial advisors in St. Louis operates diligently to understand your unique financial situation and tailor strategies that match your life aspirations.
Customized Financial Roadmap
We begin by undertaking a thorough analysis of your current financial status, including income, expenses, assets, and liabilities. This helps us develop a personalized financial roadmap that caters to your short-term needs and long-term objectives.
Investment Portfolio Management
We create personalized strategies to balance your portfolio, balancing your risk tolerance with your time horizon. Our team consistently monitors and adjusts your investments to meet your financial goals, making sure that your portfolio remains robust and adaptable as market conditions change.
Retirement Strategy
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 with ease and with confidence.
Tax Planning
Effective tax planning ensures more of your hard-earned money with yourself and your family. Our advisors are expert in tax laws and strategies that can decrease your tax liability and improve your overall financial health.
Legacy Planning
We also offer informed guidance on estate planning to help you preserving your legacy. From wills and trusts to estate tax strategies, we make certain your assets are distributed according to your wishes while lowering tax burdens.
Continuous Oversight
Financial planning is not a single event but a constant process. We provide ongoing monitoring and regular reviews to adjust your financial plan to any changes in your life circumstances or economic environment.
Client-Centric Approach
At Correct Capital, our approach is highly client-centric. We pride ourselves on building long-lasting relationships based on trust, transparency, and personalized service. Your financial well-being is our highest priority, and we are dedicated to helping you attain your financial goals with integrity and excellence.
Other services we offer in Tempe, AZ include:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Hire Correct Capital as Your Tempe, AZ Fiduciary Financial Advisor
Selecting a financial advisor in Tempe, AZ with a fiduciary duty is essential to ensure your long-term interests stay protected. At Correct Capital Wealth Management, we are pleased to be fiduciary financial advisors who hold in high regard the financial success and peace of mind of Tempe, AZ individuals and business owners equally. Our team is comprised of CERTIFIED FINANCIAL PLANNER™ (CFP®) professionals and we are a Registered Investment Advisor (RIA) with the skills and qualifications necessary 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.
Contact us today at 314-930-401(k) or contact us through our website to schedule an appointment and find out more about how we can assist you reach your financial goals in Tempe, AZ.