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Important Definitions

Wealth Advisor - Wealth Manager

A person or organization employed by an individual or mutual fund to manage assets or provide investment advice. Also called advisor or financial advisor or investment advisor or investment counsel. Alternatively spelled adviser. Heron Financial Group, LLC provides wealth advisory services.

Registered Investment Advisor (RIA)

Investment advisor registered with the SEC and regulated by the Investment Advisers Act. Heron Financial Group, LLC is a Registered Investment Advisor.

Advisor vs. Adviser

Dictionaries vary on their interpretation of the spelling, but there have been some conventions adopted for journalistic standards. "Advisor" is usually listed as an alternate spelling of "adviser" and has gained common usage as a TITLE for someone in an ADVISORY position. One source suggests that an "adviser" is someone who gives advice, whereas an "advisor" is someone specifically tasked to provide such advice. Heron Financial Group, LLC prefers the "advisor" spelling.

Wealth Management

A type of financial service that combines personal investments, tax planning strategies, estate planning and legal counsel. It is designed to provide a broad array of services within the confines of one office. Heron Financial Group, LLC provides wealth management services.

Investment advisory service

A business that provides investment advice to clients for a fee, which is calculated as a percentage of assets under management or on a per hour arrangement. Investment advisors are required to register with the Securities and Exchange Commission and abide by the rules of the Investment Advisers Act. Heron Financial Group, LLC provides investment advisory services.

Financial Planner

An investment professional who helps individuals set and achieve their long-term financial goals, through investments, tax planning, asset allocation, risk management, retirement planning, and estate planning. The role of a financial planner is to find ways to increase the client's net worth and help the client accomplish all of his/her financial objectives. . Heron Financial Group, LLC provides financial planning services.

Trust

A legal arrangement in which an individual (the trustor) gives fiduciary control of property to a person or institution (the trustee) for the benefit of beneficiaries. Heron Financial Group, LLC advises clients on the preparation of trusts in consultation with appropriate legal counsel.

Estate Planning

The preparation of a plan of administration and disposition of one's property before or after death, including will, trusts, gifts, power of attorney, etc. Heron Financial Group, LLC provides estate planning services.

Retirement Planning

The process of planning for retirement, specifically in terms of making financial plans. Most often, retirement planning involves depositing money into a retirement account, and purposefully saving money for the future. There are many different types of retirement plans available, including an Individual Retirement Account (IRA) and a 401(k) plan. In most cases, employees are provided with a retirement plan by their employer, and contributions to the plan are deducted from the employee's paycheck. Some employers will match a certain percentage of an employee's contributions, adding more money to their account. Most plans have different rules and guidelines, including details such as when the money can be withdrawn. Heron Financial Group, LLC provides retirement planning services for individuals and also consults with corporations establishing or revising retirement plans for their employees.

Fiduciary Standard of Care

A fiduciary duty is a legal or ethical relationship of confidence or trust between two or more parties, most commonly a fiduciary and a principal. One party, for example a corporate trust company or the trust department of a bank, holds a fiduciary relation or acts in a fiduciary capacity to another, such as one whose funds are entrusted to it for investment. In a fiduciary relation one person, in a position of vulnerability, justifiably reposes confidence, good faith, reliance and trust in another whose aid, advice or protection is sought in some matter. In such a relation good conscience requires one to act at all times for the sole benefit and interests of another, with loyalty to those interests.

A fiduciary duty is the highest standard of care at either equity or law. A fiduciary is expected to be extremely loyal to the person to whom he owes the duty (the "principal") he must not put his personal interests before the duty, and must not profit from his position as a fiduciary, unless the principal consents. The word itself comes originally from the Latin fides, meaning faith, and fiducia, trust. Wealth Advisors are expected to uphold the fiduciary standard of care. Heron Financial Group, LLC abides by the fiduciary standard of care.

Investment Broker

An individual or firm which acts as an intermediary between a buyer and seller, usually charging a commission. Investment Brokers, also known as Broker-Dealers, are regulated by FINRA. Heron Financial Group, LLC is NOT an investment broker.

Suitability Standard of Care

The Suitability standard of care provides that an investment broker need only make recommendations that are "suitable" as opposed to what is "best" for the client based on their profile. For example, there may be five similar investment products that are "suitable" to meet the client needs. Of the five products, there may be one that is clearly the best selection for the client, but the investment broker, under a suitability standard, is free to select any one of the five products. Why would the investment broker recommend something that is not in the client's best interest? It's possible that one of the other products could be the investment broker's firm's proprietary product, or it might pay out a higher commission or fee to the broker for recommending them. Heron Financial Group, LLC abides by the higher fiduciary standard of care.

Securities & Exchange Commission (SEC)

The primary federal regulatory agency for the securities industry, whose responsibility is to promote full disclosure and to protect investors against fraudulent and manipulative practices in the securities markets. The Securities and Exchange Commission enforces, among other acts, the Securities Act of 1933, the Securities Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940 and the Investment Advisers Act. The supervision of dealers is delegated to the self-regulatory bodies of the exchanges. The Securities and Exchange Commission is an independent, quasi-judiciary agency. It has five commissioners, each appointed for a five year term that is staggered so that one new commissioner is being replaced every year. No more than three members of the commission can be of a single political party. The Securities and Exchange Commission is comprised of four basic divisions. The Division of Corporate Finance is in charge of making sure all publicly traded companies disclose the required financial information to investors. The Division of Market Regulation oversees all legislation involving brokers and brokerage firms. The Division of Investment Management regulates the mutual fund and investment advisor industries. And the Division of Enforcement enforces the securities legislation and investigates possible violations. Heron Financial Group, LLC is regulated by the SEC.

Financial Industry Regulatory Authority (FINRA)

A self-regulatory organization founded in 2007 by a merger between the NASD and NYSE Regulation, Inc., which took on all of the responsibilities previously handled by the NASD. The company is responsible for the operation and regulation of the Nasdaq stock market and over-the-counter markets. FINRA investigates complaints against member firms and tries to ensure that all of its members adhere to both its own standards and those laid out by the SEC. FINRA has the power to expel its members from an exchange in the case of wrongdoing, but it cannot take legal action against a member other than by reporting it to the SEC. The organization is run by a Board that takes half of its representatives from the securities industry and half from the public. Heron Financial Group, LLC is NOT regulated by FINRA.