5 signs it’s time for a change of financial advisor
When it comes to your financial advisor, breaking up can be difficult.
Changing financial advisors can feel “almost the same as dividing” a love affair, says Patricia Jennerjohn, certified financial planner at Focused Finances in Oakland, Calif., Because the intimacy of financial knowledge can run deeper than the connections. marriage.
“People have told me things they haven’t said to their wives or husbands,” adds Celia Brugge, certified financial planner at Dogwood Financial Planning in Memphis, Tennessee. “A client was diagnosed with cancer, and I was the first person they said because the first thing he thought about was, ‘How am I going to pay for the treatment and how will it affect it my family? ‘”
While the performance of your retirement savings over time is an obvious measure to judge your Financial Advisor, the relationship often ends for more emotional reasons, experts say. Here are some signs that it’s time to cross your financial advisor off your Valentine’s Day card list.
1. You’re afraid to call your financial advisor
If you’re having trouble picking up the phone to ask a financial question, that’s a bad sign. “If you don’t call because you don’t think your concerns are important, or if you feel like, ‘they’re too busy – I don’t want to disturb them’, those are big red flags,” Jennerjohn said.
Ask yourself why are you afraid to call? If the calls you made weren’t forwarded quickly, or if the conversation seemed rushed after you logged in, it might be time to take a look at if it’s working. “Some may feel like little potatoes compared to others [wealthier] customers… but you shouldn’t think that’s a problem, ”Jennerjohn adds. “That’s all the money you have in the world, and it deserves our full attention.”
2. Your financial advisor is not listening to you
Jennerjohn has a client who is on a two-fold date with her because she can’t muster the courage to break up with her other financial advisor. “My client says, ‘I make requests and suggestions, but he just brushes me off,’” she says.
“It’s a bit like “don’t ask the doctor, just take the prescription”. They feel intimidated to stay with this person.“
Patricia jennerjohn, Certified financial planner
Often times clients can be intimidated by a fancy suit and desk, and a barrage of clever advice passing over their heads. “It’s kind of like, ‘don’t ask the doctor questions, just take the prescription,’” Jennerjohn says. “They feel intimidated to stay with this person.”
3. Your financial situation is changing, but counseling is not
Similar to not hearing from you, it doesn’t change financial strategy when a major life event looms on the horizon, such as retirement. Some advisers get stuck in the “build-up phase,” Brugge says, rather than preparing for when your investment savings replace a regular salary.
“You saved all that money, but it’s in different pots of money – some may be in taxable accounts, maybe you’ve remarried and have his money,” Brugge says. “How do you decide what to withdraw, when and in what order the accounts should be used? These are becoming the big questions now.
4. Your financial advisor only calls to negotiate
Another red flag is that you only hear from your advisor when they want to execute a buy or sell order on your portfolio. This may be a sign that your advisor is only interested in the fees they can pocket by trading on your account, Jennerjohn says.
It is important to understand how your current or future advisor is making money. Some earn money by receiving a commission on the products they sell; others charge clients a percentage of the assets they manage (typically around 1%). Many clients prefer a paid-only advisor, who charges an hourly rate or a flat fee for services, and is not inclined to refer you to a fund that they get extra cash to sell.
If you think your advisor is just looking to make some quick cash on you, it might be time to say so for a long time.
5. Your eye is already wandering
If you find yourself listening to more financial advice or critically examining your advisor contract, you’re probably ready to take a break.
Emotionally, break up with a financial advisor or Financial Advisor can be difficult to do. Legally, changing financial advisers is pretty straightforward: sign an agreement with your new business and let your old advisor know. However, there can be financial ramifications. Check your former advisor’s contract to see if there are any termination fees you will need to pay. There may also be additional costs or tax ramifications if you transfer assets from funds managed directly by your former advisor’s company.
Either way, if you don’t feel fulfilled in your current counseling relationship, remember: you can always go.
“A financial advisor relationship is inevitably more than numbers… it can be incredibly close,” says Brugge. “It’s an incredible responsibility, and our customers deserve the best.”