Nancy Graham November 30, 2017 Personal Wealth Breaking Up With Your Advisor In my past few “No Dumb Questions,” I’ve been covering the kinds of questions you may be uncomfortable asking your current financial advisor. Here’s one of the trickiest of all: “How do I break up with my advisor?” Awkward, right? And since most investors don’t hop from one advisor to the next every-other day, it can be daunting too. How do you go about it? And what should you expect during the transition? While I hope that breaking up with your advisor is your choice of last resort, let’s take a look at what it takes to do so if you do. Like the Neil Sedaka song goes, breaking up is hard to do. This is true for personal and professional relationships alike! Both usually involve at least a little heartbreak and a whole lot of paperwork, especially if kids or marriages are involved. That said, if you’ve thought it over carefully and concluded that your financial advisor is no longer serving your best financial interests, there’s no sense stringing them along. A clean break and a fresh start may be the best thing for both of you over the long haul. As with any romance that’s run its course, there are varied reasons why you might decide it’s time for a change. Sometimes there are irreconcilable differences. The old, “it’s not you, it’s me” split. Other times, maybe it IS them. One way or another, they’ve done you wrong and it’s time to move on. There also may be times when your advisor is the one to call it quits on you. Ouch. A few tips to remember Regardless of the reason, I can offer a few tips, no matter what. First, it’s best if you and your advisor are able to remove emotions from the mix. In an actual marriage, you’ve exchanged loving, “in sickness and in health,” “no matter what” vows. But remember, your relationship with your financial advisor is ultimately a business transaction. So if you’ve thought it through and reached a decision that’s right for you, there’s no need to feel guilty or apologetic about it. That holds true even if – in fact, especially if – your advisor is also a personal friend or family member. Second, if you’re the one making the first move, your advisor will probably ask why … and may follow up by trying to change your mind. “Why” is a valid question, and it’s not necessarily unreasonable for an advisor to try to talk you out of the move. But think through in advance how you’d like to respond. If you’re generally fond of your advisor, you may want to offer an explanation. A reputable advisor will appreciate your feedback and accept it in the spirit it’s given. On the other hand, if you’re fed up with the relationship, less is probably more for continued conversations. If you want to vent, fine. But if you’d rather avoid the confrontation and confusion … remember, you do NOT owe your advisor an explanation. A polite but firm “none of your beeswax” is fine. Let your new advisor serve as your liaison. This leads me to a final point about what to expect when the transition occurs. I’d love to tell you: No worries! Your new advisor has a magic wand to wave away every hassle. In real life, it doesn’t always go quite that smoothly given the number of players involved. There’s your old and new advisor, as well as the various account custodians where your assets are held. And everyone needs to play nice together if at all possible. So, even when everyone is competent and cooperative, the shift calls for careful planning, accurate execution and substantial paperwork to safeguard your financial security, prevent unnecessary costs, and avoid any other administrative hassles. Add an incompetent or unscrupulous player or two into the mix – which is sometimes why you’re breaking up to begin with – and even the best new advisor in the world may need your time and patience as they help you navigate through the roadblocks and detours that might be thrown your way. While I hope you and your current advisor are enjoying a peaceful and prosperous relationship that will indeed last you for as long as you both shall live, I also hope this helps you think through what it may take to move on if it’s no longer a match made in heaven. What other questions have you got on your mind about your money management? Share: Facebook Twitter LinkedIn Email CIRO Advisor Report
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