Do These 6 Things Now
Relationships can be difficult, and your relationship with your financial advisor is no different. Maybe you do not feel like you are getting the attention you deserve. Maybe your advisor is not providing custom advice based on your needs and objectives. Maybe you are fed up with hidden fees or subpar returns.
Whatever the reason, if you are not happy with your advisor, you have a right to leave. After all, it is your financial future at stake. If you have decided to “break up” with your advisor, it is important to do it the right way. The following steps can help.
#1 – Line up a new advisor.
It is wise to find a new advisor before leaving your current one. Your new advisor can help facilitate a direct transfer of assets to a new custodian, which helps ensure a more seamless transition. Provide your new advisor with copies of past account statements to ensure the new firm can handle your various investments. Also, make sure you have a clear understanding of the advisor’s capabilities, fees and approach prior to signing on. You probably do not want to transition advisors again any time soon.
#2 – Check your agreement.
Before notifying your current advisor of your decision to leave, double check your advisory agreement (sometimes referred to as a letter of engagement) to see if there are any steps you must take to properly sever your relationship. Some firms request a 30-day notice to ensure the smooth transfer of accounts, or you may need to provide written notice.
#3 – Notify the advisor.
As mentioned above, your agreement may specify that you need to provide written notice of your intent to leave. Even if it does not, it is a professional courtesy to notify an advisor that you plan to take your business elsewhere. If you are comfortable having a phone conversation, you offer the advisor a chance to ask questions and potentially improve his or her services for other clients. A professionally worded email also works if you feel that a conversation would be too awkward.
#4 – Transfer your accounts.
Your new advisor should lead the transfer process. If he/she does not, you may want to reconsider your choice. After notifying your prior advisor of your decision to leave, you should be able to work exclusively with your new advisor to transfer assets, sign paperwork and begin developing a new financial plan. It is not uncommon for account transfers to take seven to 10 business days, so be prepared to lose access to your assets for a period of time.
#5 – Obtain copies of all documents.
Make sure you obtain copies of all financial documents prior to leaving your current advisor. It is especially important to have records of your full financial history in the case of a future IRS audit. Even if you are never audited, maintaining complete records is an important part of your financial health.
#6 – Follow up.
Once the transition to your new advisor is complete, be sure to follow up on past accounts and investments to make sure everything transferred according to plan.
At Creative Planning, we understand how difficult it can be to end an advisor-client relationship. That is why we work with clients to help ensure the “break-up” process is as smooth as possible. Our experienced professionals coordinate all aspects of the transition to help ensure you’re up and running as soon as possible.
If you are considering switching to a new advisor, we hope you will consider Creative Planning. To learn more, schedule a call with a member of our team. We look forward to serving you.