How to Fire Your Financial Advisor in 4 Simple Steps

My tips for Switching to a New Financial Advisor:

1. Acknowledge it as a Professional Relationship: Recognize that your relationship with your financial advisor is professional. If you feel that your current advisor isn’t meeting your needs, it’s okay to explore other options. Trust your instincts and prioritize your financial well-being.
2. Seek a Good Fit: Look for a financial advisor who aligns with your personality and expertise requirements. Ensure they understand your financial goals and are equipped to guide you effectively. A strong rapport and shared understanding are crucial for a successful partnership.
3. Initiate Conversation: Once you’ve identified a potential advisor who seems like a good fit, reach out to them for a conversation. Use this opportunity to discuss your financial goals, concerns, and expectations. If you feel comfortable and confident in their abilities, express your interest in working together.
4. Trust Your Instincts: Trust your intuition when deciding to switch advisors. If you feel a genuine connection and trust with the new advisor, proceed with the transition. Remember that the account transfer process, especially for investment management, is typically seamless and managed by the new advisor.
5. Embrace the Change: Embrace the opportunity to work with a new advisor who is better suited to support your financial journey. Be open to building a trusting relationship and collaborating with them to achieve your financial goals. Enjoy the fresh perspective and guidance they bring to your financial planning.

For additional insights, check out this article with relevant tips.

What should people do if they are unhappy with their current financial advisor?

Definitely shop around. You really want to be clear what you want to get out of working with an advisor, because advisors work in many different ways and can offer a wide range of services – or merely do investments. Know that there are advisors who specialize in serving people with specific financial circumstances, for example women on their own, or young families, or people with equity compensation.

Is it best to move straight on to another advisor or wait for a cooling off period before scouting around again?

I think it depends on what your current advisor is doing. If they are employing a very active investment strategy with lots of changes, it might be best NOT to have your accounts unsupervised for a while – markets could change without someone adjusting. If it’s a broadly-diversified allocation of funds that don’t change much, I think it’s fine to fire your current advisor before you find someone new.

Perhaps some people are best suited to going it alone with their finances?

This is true – it depends what you’re hoping the advisor can do for you. If you feel OK doing your own investments or using a roboadvisor, you can hire a financial planner on an hourly basis to help with specific questions as-needed.

It seems plenty of people would like to fire their financial advisor, but are afraid to. THIS IS TRUE! Why are people often intimidated by their financial advisors? I DON’T KNOW – IT IS A SHAME. Is there an imbalance in the power dynamic here?

For one thing, people often don’t know they CAN fire their advisors! AND you don’t even have to speak with the advisor to do so. You can just leave. If your accounts are at a large custodian like Fidelity or TD Ameritrade, you can simply call that company and ask that your advisor be removed from the accounts. Your advisor will find out and likely contact you, but don’t feel obligated to answer!

If you’re nervous to have the conversation with your advisor, that might be a signal that it’s time to leave! Remember – it’s your money! You should feel comfortable talking about anything with your advisor (in my opinion).

What should one do if the financial advisor tries to talk you out of leaving or does not politely comply with you after you’ve sent them a written notice that you wish to terminate your fiduciary relationship?

You can initiate a transfer without your current advisor’s consent – in most cases I’ve seen, the current advisor does not have veto power over whether you can leave of not!

What should people do if they are unhappy with their current financial advisor?

First, think about why you are unhappy. Was it something the advisor could have done better or was it something out of their control (e.g. market fluctuation)? If it was poor service or bad advice, then a conversation with your advisor about what you are unhappy about is called for. If after that call, you still are unhappy, then it is time to start searching for a new advisor.

Is it best to move straight on to another advisor or wait for a cooling off period before scouting around again? Perhaps some people are best suited to going it alone with their finances?

If you want a professional to help guide you through tumultuous markets and provide you advice, then it is best to search for another advisor. If you have the time, will, skill, and emotional fortitude to handle market swings, then by all means, do-it-yourself.

DALBAR has shown that on average, stock mutual fund investors return about 3-4% less per year than the S&P 500 with “investing and savings behavior” being the #1 reason why. That can make or break someone’s financial plan, which is why I believe having a good financial advisor on your side is well worth the fee.

Vanguard has also done a study that shows that an advisor can add up to 3% returns for a client per year.

It seems plenty of people would like to fire their financial advisor, but are afraid to. Why are people often intimidated by their financial advisors? Is there an imbalance in the power dynamic here?

I think this is human nature. Financial advisors are typically in the relationship business. Their clients know, like, and trust them (well, maybe trusted them before they wanted to fire…). It feels bad for a client to fire their advisor they have been working with for years. It’s kind of like changing doctors after a misdiagnosis even though that doctor may have been helping you for years.

What should one do if the financial advisor tries to talk you out of leaving or does not politely comply with you after you’ve sent them a written notice that you wish to terminate your fiduciary relationship?

I believe that the client should speak with their advisor about their unhappiness. Try to see if they can make things right. If they can’t and they persist, that is completely unprofessional of the advisor. I would simply block their email address and phone number.

What should you do if you’re unhappy with your financial advisor?

Think about why you are unhappy with your adviser. Is it poor performance, irregular communication, high fees, or a misunderstanding? Most advisers want happy clients, so explaining why you are unhappy may easily fix the problem.

Best to move to another adviser?

It depends. Are you confidant you can manage all the portfolio decisions? If so, you are a candidate to self-manage your account. If you are not sure what you are doing, begin shopping for an advisor before leaving your old adviser. Still not sure? Here is an article I wrote about working with advisers: Why Work With An Adviser? (lloydsintrepid.com). There is a checklist for what to look for in a new adviser.

Don’t be afraid of you adviser. You are the customer, and the customer is always…

Dealing with difficult advisers:

Threaten to file a complaint with the compliance department or state regulator. That always gets people’s attention. Your new adviser can move all your account holdings to a different broker-dealer without any contact to the existing adviser. This process is helpful to avoid a difficult “break-up” meeting.

If you are unhappy with your financial advisor I recommend communicating with your financial advisor about it if you think the situation can be improved. A tough conversation but that might be easier than having to find and move over to a new advisor.

If you just don’t jive with your financial advisor or for one reason or another the situation isn’t mendable then it’s time to move on.

When moving on from a financial advisor most will be professional about it. If the advisor after giving written notice and reasonable time to take action does not comply your next step should be filing a FINRA complaint. Then you will walk through their dispute resolution process.

What should people do if they are unhappy with their current financial advisor?

First, it’s important to reflect on why you are unhappy with your current financial advisor.

Do they not communicate frequently enough, or in the manner that works best for you?

How well do they understand your needs and proactively work to meet these needs?

Are they providing clear answers to your most important questions?

Is the advisor being proactive to provide advice on areas you may have missed on your own?

How well do you understand the value your financial advisor is providing you?

Can you see direct benefits for your financial well-being by working with this advisor?

A financial advisor-client relationship is a professional engagement, so it is always best to extend professional courtesy and communicate openly with your advisor. You should feel comfortable expressing any concerns you have with the advisor and give them a chance to respond. It may be an oversight or small adjustment in service that can be corrected.

It is worth considering if your advisor specializes in helping clients just like you, or if they are spread out trying to help many different types of clients. You may get more benefit working with someone who is an expert in helping clients like yourself. You should find out if your advisor has a defined process for how they work with clients, with clear expectations for what they deliver, or if they tend to be more reactive in their approach.

However, if you feel that the issues are a direct result of the way in which the advisor manages their practice, it is ok to look for alternatives.

A good financial advisor should be able to communicate clearly and often. They should have a clear understanding of your needs and be working proactively to meet them. They should be anticipating changes and providing advice to help you make informed decisions. They should be able to clearly articulate the value they provide and demonstrate this value to you on an on-going basis throughout your relationship.

If your current advisor is not meeting your needs and is not able to provide the service you expect, you are always free to look for a new advisor.

An excellent advisor provides their clients with guidance on how to create their vision of an ideal financial future and how to take the steps needed to achieve it. This is achieved by constantly providing relevant value. If that cannot be offered, then a change may be necessary. It is best to communicate first with the existing advisor regarding to see if the current relationship can be improved.

People generally look to avoid confrontation and firing your advisor can be very uncomfortable. Most advisor relationships die of neglect rather than failure. It is difficult to break up with someone that the client may have used for years, that they generally like and feel as though has done a good job. But if the advisor is no longer proactively exploring for what is relevant to the client, the risk of maintaining the relationship could outweigh keeping it. Especially when the existing advisor may be only focused on narrow aspects of a client’s life. There is much more to someone’s financial life than just investments and insurance.

If an advisor becomes an obstacle in a client making a change, this is evidence that the change needed to occur. This underscores the advisor’s focus on themselves rather than the client’s. Manipulation should never be part of any relationship.