How to Change Financial Advisors?
Having an experienced and savvy financial planner on your side is useful when it comes to making important decisions about your retirement. Sure, you could make all those decisions yourself, but a financial advisor can provide you with counsel that comes from years of analyzing market trends and individual investments.
But sometimes things don't work out so well. And if your money isn't working for you, it may not be simply a function of a down market. You may need a new financial advisor.
Problem is, the relationship between a financial advisor and his or her clients is a tight one, and if you've decided to change your own financial advisor, you may be facing down the most awkward social interaction since you broke up with your high school sweetheart. But don't fret. If you approach the problem calmly and rationally, there's no reason it has to be too painful. Here are a few tips to consider.
First, determine whether you really do need a new financial advisor. The fact that you're considering it at all may signal there's an issue. That can mean a natural downturn in your mutual fund's value, or it can mean something much more frustrating. Look for big surprises in your portfolio, like a substantial unanticipated change in your net worth. Any lengthy lack of communication from your current financial adviser can also signal that you need a new one.
If you decide to make a change, find a new financial advisor before leaving your current one. Even if your financial planner isn't meeting your expectations, don't drop him until you've researched your other options. Find a few options and set up some meetings, and take your portfolio along. Once you've chosen your new advisor, you'll likely be much more confident when it comes to sitting down to actually talking with your soon-to-be-ex-advisor.
Remember that changing financial advisors doesn't necessarily mean moving your investments. If you have a fee based financial advisor, you may only be changing because the fees are too high. But your investments are still viable -- you just need to transfer control of them to a new financial advisor.
Have the talk. It's like ripping off a Band-Aid: Just call your advisor and tell him or her you're going in a different direction. And if the problem is lack of communication, you may not even need to talk to him or her directly.
Get your stuff back. Make sure you get any records or relevant documentation back, including all photocopies.
Don't make any hasty decisions. Make it a point to hold off on any major investment decisions until you're no longer angry or frustrated by the whole process. This is another good reason to find a new advisor before leaving the old one.