You want to fire your financial advisor. Many people find themselves in a situation like this, where they are unsure if they should continue using the same person or service or make a move. Your financial advisor has to be someone you trust and believe in. If they are not providing you the help you need, or your current advisor is not being realistic about their portfolio management, it may be time to find a different financial advisor.
You may be thinking about finding a different advisor for many reasons. They may include costs, getting bad advice too often, or wanting a new financial advisor who will take control and “fix” what the current advisor is doing or has not done.
Take a deep breath. The good news is that you can hire a new advisor, and you can do so with more clarity when choosing a professional who is capable of meeting your needs.
Why Evaluating Your Financial Advisor Matters
One of the first steps is to evaluate your financial advisor. It’s critical to understand what is going “wrong” with the situation. For example, if the stock market has been on a downswing for some time and your investment records indicate your investor isn’t taking aggressive enough action, it may be time to make a switch.
Here’s what’s most important to remember. If you do not think about what went wrong with your former advisor, it will be much harder to choose another advisor more aligned with your goals.
Also, note that there is no rush to find a new financial advisor. You can take a few extra days to check out some options, consider your financial plan goals, and really get a better idea of what you need and want from a provider.
On the other hand, it may be time to move on, especially if you’ve put off this decision for some time. To avoid making a poor decision, use Invested Better to help you. Get matched with a financial advisor who can provide the resources and tools you need to make better decisions.
Signs You Might Need a New Financial Advisor
You ask for financial guidance and do not get it. Your financial situation seems to be worsening instead of getting better. You may know that the stock market is not doing all that well right now. So, how do you know if your financial advisor is the problem or if investments right now are just not good?
Before you formally terminate your relationship, look at some of the most important signs that it is time to switch to a new financial advisor. If this is happening to you, it may be time to get started on finding a new advisor.
1. When It’s Difficult to Reach Your Advisor
While financial advisors are busy professionals, their job is to meet your needs. Ultimately, that means they need to be able to communicate with you. If poor communication is the source of your concern, and you have already talked to the advisor about it, it may be time to move on to another person.
What is a timely manner, though? You can expect for your financial advisor to be able to get back to you within a day or so, depending on the situation. Remember your client agreement and how frequently they promised to connect with you. If that is not happening, it may be time to move on to other advisors.
2. When There’s a Lack of Transparency
Personalized advice is a very big advantage of working with an advisor. However, if you do not know what they are doing, when they are making changes, or how often they even look at your account, that is a concern.
Also note that if they are fiduciary, they have an obligation to operate in the best interest of the client. If you feel, at any time, that they are not making financial decisions based on your needs but perhaps on the money they could make selling investment products from others, it may be time to move on.
3. When Your Portfolio’s Performance Doesn’t Meet Expectations
You are working with a financial advisor for a reason: to build your investment portfolio. If you are not seeing the results of that, it may be time to move on. People tend to only look at the short-term ups and downs, and that can be a problem. Instead, look at the growth over a specific time frame, such as quarter to quarter or even one year over the other. If you are not seeing improvements over the long term, it may be time to make your move.
Use historical records to help you gain more insight. Do some research on what other investors have earned over the same period of time. Determine what assets and services you have now that have changed since you got started.
4. When there’s a Misalignment with Your Goals
There are some situations where poor performance is a big factor. If your money is not growing or is not being put where you believe it should be, it may be time to move on. The key here is to pay attention to your own investment accounts, do some research, and know where your investments are going. If you do not feel comfortable with any aspect of the process, opening new accounts could be beneficial to you.
Evaluating Your Current Financial Advisor
Before you fire your current advisor, take the time to review and evaluate your current provider and relationship. Determine how well they are meeting your goals and what areas concern you.
Review Your Portfolio’s Performance
Start with a review of your portfolio investor satisfaction. That is, are you seeing improvement in your investments over time? If your portfolio is growing in value but not at the rate expected, you may wish to learn why that is the case. If the advisor cannot offer advice or clarity, that is a concern in itself. Remember, if your money is not doing what you need it to, it is okay and expected that you want to make a move.
Assessing Communication
Your relationship with a financial advisor will likely depend on their communication with you. Some firms are very poor in the way they manage communication, but that does not give them an excuse not to engage with you. In short, you are paying advisors for their time and services. If they are not available for the amount of time you need them to be, then you may wish to decide to move on.
Checking Credentials
Financial advisor credentials are an important consideration. If you want help with personal finance but the person you are working with offers wealth management services, they may not be the right fit. You also want to know if they are full-service investment advisors or are more likely to provide their clients with just one or two services, no matter your financial goals.
Consider These Before You Terminate Your Financial Advisor
Before you decide to move to other financial advisors, make sure you consider the following considerations:
Is it Really Necessary?
Before you actually decide, make sure you consider the overall benefit you want to see in the transition. Financial advisors who continuously limit you are not worth sticking around with, but if you have not given the individual time to make changes or update your financial goals, you may want to give them another chance.
Collect All Documentations
Your next step is to gather the information you need to make this a smooth transition. That includes gathering your client agreement and reading through the process to find out what you need to do. There may be a termination fee required, or you may need to provide written notice 30 days in advance. While you can switch mid-year, you may want to consider whether that will be too difficult.
How to Fire Your Financial Advisor
Now that you are ready to move on with the process, follow these steps.
Step 1. Have a Clear Conversation with Your Advisor
Set up some time to speak to the advisor about your decision. It may help to have a well-structured statement that outlines your decisions. If you have done your research and feel comfortable with this move, you do not want to be talked out of it by your investment or financial advisors. Still, it helps to be very clear to them about what is happening.
Determine what steps you need to take to transfer from your old account. It is wise to document this process every step of the way. Also, know that you do not have to actually meet with or talk directly to your financial advisor. You can send written notice and move on that way.
Step 2. Get a Written Confirmation that the Account will be Transferred
Once you have communicated that you are leaving the firm or advisor, the next step is to request a written confirmation of the transfer of your old account to the new one. You do not want to do it yourself. That could lead to serious financial loss due to fees imposed by the government on any tax-advantaged plan.
Step 3. Be Prepared for Fees
You are likely to have to pay a fee for this process. The actual cost is dependent on various factors the firm has in place. However, once you decide to make a move, the advisor should tell you exactly what to expect in terms of fees and timelines. You may have to pay fees to liquidate your assets. This should be spelled out in your client agreement.
Step 4. Find a New Advisor
While we are putting this at the bottom of the list, it should be something you do much sooner in the process. You want to be sure you hire someone who can manage your money positively and help you meet your financial goals more closely. Do some research now before you close your existing account. That way, you have a better opportunity for a smooth transition throughout the process.
Getting the Help You Need Makes All of the Difference
Sometimes, relationships just do not work out. If the financial advisor or firm that you are working with just is not helping you meet your goals for any reason, it’s worth having a conversation with them. If they cannot make it better, remember that you are the client. That means you can take your money, pay your fees, and move on to other investments.
Invested Better can help you with that process. When you use our free advisor match tool, we help you find the professionals best in alignment with your objectives and goals, and that can mean a better outcome for you. Get started now with our team.
