My financial adviser is very nice, but not very effective. After a lot back and forth I have decided it’s time to move on. Now, how do I actually do it?
You have already done the hard part—making the decision to move on to a new adviser. That process can be agonizing. People tend to worry about hurting an adviser’s feelings or making the wrong choice when choosing the new adviser that they never actually make the move.
You have made your decision. And while the rest can take a bit of time, it is actually pretty simple; just follow these three easy steps.
1. Find a new adviser first: When you’re tired of your job and ready for a change it generally makes sense to stick it out until you find a new one; the same is true when looking for a new adviser. Doing so will make it easier for you to transfer your investments, plus it will ensure that you aren’t stuck in limbo if it takes longer than expected to find someone. (I covered off some ideas on how to find a new adviser in this post.) The key to finding a new adviser is to identify your search criteria before you start interviewing potential candidates—and stick to it. You mentioned in your question that your current adviser is “nice,” but clearly that’s not enough to keep you happy. Knowing what you want—and don’t want—out of your adviser will help guide you in your search.
2. Inform your current adviser of your decision: It won’t be an easy message for you to deliver, but trust me, no matter how good they are, they have heard this news before. How you do it depends on what feels right for you. At one end of the spectrum, you can meet with your adviser in person to provide specific feedback on why you’re leaving. On the other end, you can have your new adviser initiate the paperwork on your behalf, which would allow you to avoid that uneasy talk with your current adviser altogether. I don’t recommend this approach as neither of you will get closure, but it’s an option if you are completely nuts about having that conversation. Somewhere in the middle of the spectrum is the idea of sending your adviser an email message that either outlines the real reason, or uses the old standby “I’ve decided to go in a different direction.” No matter how you do it, don’t put it off. You’ll feel better once you move on.
Years ago I broke up with a financial adviser. He did not take it well and it only reaffirmed my decision to leave. I chose the meet and provide feedback option, but he was defensive and unprofessional. That said, other people I have talked with say they had good experiences being direct with their adviser as they parted ways and were happy to do it in person.
3. Wait for the transfer to occur: Your new adviser will keep on top of this process as he or she has a vested in getting the funds transferred over. Generally speaking, it is best to hold on to your current investments until after you move. The new adviser will have an opinion on your future strategy and will want to work to minimize the impact of any deferred sales charges you might incur by making changes. In some cases investments can’t be transferred over because they are proprietary, but your new adviser will be able to flag that for you.
Once the deed is done, raise a glass and toast to new beginnings. A great financial adviser can have a huge impact on your quality of life so finding someone that delivers the goods for you is a victory worth celebrating.