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How to Switch Financial Advisors

Switching financial advisors is a big decision. Over time, it’s possible you’ve developed a personality conflict, don’t like the fee structure or you’re just not on the same page with your current advisor anymore. Perhaps, you’re simply moving to a new location or your advisor is retiring.

Whatever your reason for changing, here are some suggestions on how to switch financial advisors.

Do Your Homework

Before making the switch, do your research so you’ll have a better idea of what kind of financial advisor you want to work with. Depending on your reason for changing advisors, it’s a good time to investigate other options that may fit your goals better. As you think about switching financial advisors, some topics might include:

  • Type of advisor you’d like to have (i.e., actual person, online service, local)
  • Advisor’s specialty or focus (i.e., banking, retirement, investments, estate planning, tax planning)
  • Kind of firm you’d feel most comfortable working with (i.e., independent, larger corporation, banking institution)
  • What the fee structure looks like
  • Which advisor credentials best fit your needs

Doing an online search, talking with several advisors or firms or getting referrals from friends and family are good ways to start the research process as you seek out new a financial advisor.

Review Your Goals (and Reasons)

Once you’ve decided to switch financial advisors, review your goals, current financial plan and overall investment strategy. Knowing where you are and where you’d like to be will help as you transition to your new advisor. Take a look at your financial plan, retirement needs and any life changes that may have recently happened or may be coming. You’ll have a fresh perspective and clearer idea of what you’d like to achieve going forward.

Also, think about the reasons you want to change financial advisors. They will help you focus in on some new goals or changes you’d like to make in your overall strategy. In this case, the “why” can help drive the “how”.

Choose a New Advisor First

After deciding you are going to switch financial advisors, the transition will be a lot smoother if you have an advisor in mind you’d like to switch to or already hired. The new advisor can give you advice during the transition period and help facilitate moving your assets, account information and investments. Since he or she will be helping you set up the next phase of your wealth management, they should also have your best interest in mind as these items are being transferred.

Keep It Positive

It can be difficult to end a business relationship — for any reason. Communication is a very important part of the transition between financial advisors. Begin by having an open and up-front conversation with your current advisor about moving your accounts. Staying positive will help make the transition smoother and future communication less awkward. This will be especially important as you review your contact or Letter of Engagement with your current advisor. 

Be Prepared for … Anything

This step sounds ominous, but it’s only meant to indicate that you should be prepared for (or at least, not be too surprised by) some things that you may not be expecting. When switching financial advisors, be ready to discuss fees and costs, timelines, changes to assets or accounts, tax-related issues, the overall process and how much paperwork will be involved. In some cases, you may even need to start completely over with your accounts, if some items don’t transfer or need to be cashed out, depending on what the terms are in your current investment mix. You’ll also need to be ready to make new decisions about your asset allocation and short- or long-term strategies.

Making a major change like switching financial advisors can be a daunting task but following these steps can help make it a little smoother. Contact a Farm Bureau advisor to talk about your financial planning and investment options.