Making a change is one of the hardest things to do, especially when it involves a trusted relationship. This is even truer when that relationship is with your financial adviser, a relationship that is built on discussing money and sharing some of your most personal dreams and fears.
Changing financial advisers can feel daunting. It’s a partnership rooted in trust and deep connection, and breaking up can be difficult to do, not just emotionally but logistically. It takes effort to find a new adviser, complete the onboarding paperwork, and then have the “breakup” conversation with your current adviser. But you are not alone in this journey — according to a recent YCharts survey, 75% of advisory clients left or considered leaving their advisers in 2023.
Is it a good idea to change financial advisers?
The decision to change financial advisers is purely a personal choice — only you and your partner (if you have one) know the right answer. Based on my nearly 20 years in the industry, I’ve seen many reasons why clients decide to switch. Here are a few key questions to help evaluate your current relationship with your adviser:
- Do I feel that my adviser understands my short-term and long-term goals?
- Does my adviser really listen to my needs, desires and questions thoroughly?
- Do they give me peace of mind?
- Am I confident in the advice I am receiving, AND does my adviser follow up on my requests?
- Does my adviser provide the level of service and communication promised? Are they responsive and easy to reach during working hours?
- Does my adviser follow through and complete action items and hold me accountable for my own tasks?
- Is there a larger team that could continue serving me if something were to happen to my adviser?
If you answered “no” to any of these questions or feel in your gut that maybe you are no longer happy with this relationship, then it might be time to reassess your relationship and seek other options.
How do I switch from one financial adviser to another?
I won’t sugarcoat it — switching financial advisers can feel as overwhelming as going to the doctor or filing your taxes. It requires research, paperwork and gathering documentation, such as your most recent statements, estate plans and tax returns.
However, this effort is crucial. A good adviser will ask for this information to gain a comprehensive understanding of your financial situation. If they don’t, consider it a red flag —they might be too focused on numbers and not enough about advising on your whole financial picture.
There are several ways to find a new financial adviser, but here are a couple of suggestions:
- Ask someone you respect, such as a close friend, business executive or family member, to see if they have anyone they recommend.
- Use a third-party platform like Zoe Financial, SmartAsset or Wealthramp. These databases help pair investors with firms that participate in their platforms, and all advisers listed are vetted to help ensure they meet specific standards of expertise and professionalism.
- Visit a local branch of custodians like Charles Schwab and Fidelity Investments. They can refer you to a partner firm or connect you with their in-house advisers.
- Seek referrals from another trusted professional, such as your CPA, estate planning attorney, insurance broker, etc.
- Review top adviser lists, but understand the methodology of how the list was compiled — some focus on assets under management (AUM), while others may allow advisers to pay for placement.
Regardless of how you find potential advisers, I highly recommend interviewing multiple candidates. Each is a professional who can give you different perspectives and opinions of what you should be doing with your financial life. As you evaluate your options, I suggest prioritizing candidates who hold the CERTIFIED FINANCIAL PLANNER™ (CFP®) designation. This credential signifies that they’ve completed rigorous education and training, meet high ethical standards and are well-equipped to help guide you. Use each interaction as an opportunity to learn and, ultimately choose the adviser you feel most comfortable with and whose personality and working style align with you and your goals.
How do you break the bad news to your financial adviser?
After reflecting and deciding it’s time to move on and then taking the time to research and interview multiple advisers, the dreaded moment has arrived to tell your current adviser that you’re making a change.
Don’t chicken out now — you’ve got this! There are multiple ways you can inform your adviser that you’re making a switch. In my opinion, the best approach is to communicate directly, either via a phone call or an in-person meeting. Be prepared that they may offer you fee discounts or try to convince you to stay. However, stay true to your decision unless you genuinely feel compelled to reconsider. Remember why you began this process in the first place.
Another option is to draft an email explaining your decision and requesting that they work with your new adviser to make the transition seamless.
The last and my least favorite approach is to bypass the conversation altogether. You would simply not inform your adviser and ask your new adviser to create new accounts and execute transfer forms.
However, your current adviser or firm will be notified during this process, and they will likely reach out to you with questions, so it’s often better to just give them a heads-up!
Ultimately, changing financial advisers is a hard decision and requires a lot of work, but finding the right financial adviser for your needs is worth it. The relationship between you and your financial adviser should be a true partnership. A financial adviser guides you through major life events, from marriages and divorces to births, family dynamics and even your legacy. In this relationship, you should feel comfortable to ask the hard questions, trusting that your adviser understands your goals and provides the support you need.
When you find the right adviser, it can help lead to peace of mind knowing that everything in your financial life is in order and your loved ones are taken care of, even in your absence. Seek out the best — they’re out there!
