You’re currently not satisfied with some aspect of your financial advisor’s service, and have decided to consider a change.  Before changing financial advisors,  there are many things to consider.

•  Does that mean you have to sell ALL of your current investments to buy the investments your new advisor prefers? If so, there could be a slew of commissions to absorb as you sell all investments and buy all brand new ones. Can you negotiate this to be covered by your new advisor?

Considering hiring a new financial advisor? Download our  free  Financial Advisor Interview Checklist here!

• Do your current investments have “surrender charges” or fees if you leave before the term of the investment has been met? Many times annuities can have up to a 10% fee if you sell the investment too early.  Does this significant fee outweigh changing right now? Is it better to wait until the surrender charge has expired?

• If your money is not in an IRA, but a taxable brokerage account, what is the tax consequence if you change your investment strategy? You could be facing a large tax bill if you change from one advisor to another. Make sure to discuss this with the new advisor and your personal accountant.

• Should you change your investment strategy over time (months or years) from the previous advisor to your new one to minimize some of the tax and fee issues? Realize that you may be asking your new advisor to oversee investments that are not necessarily their best ideas or in their expertise.  If your new advisor doesn’t believe in the old investments for a particular reason, is it best to simply change at once? This is not a simple and easy decision.

• There also may be costs to send each investment over to your new advisor. Can the new advisor cover this cost? Review your paperwork from your current advisor and ask your new advisor what they estimate this charge could be.

Let's say you have considered all of this and you still say "I want to fire my financial advisor".  Emotionally it’s not easy to tell someone you’ve entrusted with overseeing your financial wellness and shared your goals, hopes and dreams that you no longer want to work with them. This can be a difficult conversation.  We do find it best to address any problems with your current advisor first, and if you feel like a change is still necessary, tell the current advisor about the change after paperwork has been completed with the new advisor. Some clients choose not to directly address their now former advisor with this decision, and some clients prefer to. It isn’t a necessary step to inform your advisor as account transfers take place without the approval of your now former advisor.

If you are considering hiring a new financial advisor,  download our FREE  Financial Advisor Interview Checklist!  Be sure that your advisor is the right fit for you and your needs.

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