How To: Fire Your Wealth Advisor 

Published January 2022 

Reading Time: 3 minutes

Written by: The Zoe Team

Once you’ve made the decision to fire your wealth advisor, there are 5 key steps you should keep in mind.

Ending a relationship, no matter what kind, is never easy. It can be uncomfortable and often, something people seek to avoid altogether. Once you have made the decision to fire your wealth advisor, it’s best to just “pull off the band-aid” so to speak.

Besides obvious cases such as negligence or fraud, your relationship with your advisor can end for a number of reasons, which we discuss in our previous blog, Why I Should Fire My Wealth Advisor. Regardless of the reason, here are some tips on how to go about firing your advisor.

1. Review Your Contract

The first (and most important) step in firing your advisor is to review your contract with them. Within this contract, there will be a clause(s) that explains the exit process and any fees that are payable. These fees could relate to your annual fixed fees. For example, are you liable for the rest of the period? Can you pay a penalty to exit early? And even, what does it cost to transfer your investments? Some contracts make you liable for all of the annual fixed fees. Other contracts may allow you to pay a penalty to terminate the contract early. Once you know what steps you need to take, and how much you will be charged, you can begin the process.

2. Make a Plan for The Future

If the relationship between you and your advisor didn’t work out, it is time for you to create a new plan for your wealth and investments.

The first option is to start managing your own accounts. While some people prefer to do this, problems can arise. Most people don’t have the expertise that wealth advisors have in terms of helping you manage market uncertaintyestate planningretirement planning, and tax strategy

The second option is to hire a new advisor. The benefit of this is that an unbiased financial advisor can help manage the entire process of firing your current advisor and transferring your portfolio, so all you have to worry about is finding the right advisor for you. 

Regardless of what you decide, you must start the preparation prior to firing your current advisor. If you are doing it alone, you need to organize all the paperwork necessary to move your investments to a new brokerage. If you hire a new advisor, they can manage this process for you.

3. Collect the Investment Records

Wealth advisors are legally required to transfer their clients their security historical records. If the client is transferring taxable investment accounts, they should also keep personal records of the cost basis of these securities. This amount will be included in their transferred accounts, but it never hurts for them to have it in their own records. This information is required when filling out income taxes.

4. Fire Your Advisor 

This is the toughest part. There are many ways to deliver the news, you can write a personal note to them, email them, or call them. Whatever you feel most comfortable doing. No matter what method you choose, remember to specify an end date

Do your best to leave your emotions at the door. This is a business decision, and no matter how nice your advisor is, you are leaving for a reason. Remind yourself of that reason and keep any communications as brief and firm as possible. 

If you go the call route, be prepared for some pushback. They might try to convince you to stay so the key is to let them know that the move is going to happen and you are just informing them of the decision that you have already made. 

Example of an email:

“Hi (Advisors Name) 

I want to thank you and express my appreciation for all your help over the past few years with my personal finances. At this time, I’ve decided to move my accounts to another advisor that I feel is a better fit for me as of (end-date). I wanted to notify you as you should be receiving the transfer requests shortly.

I wish you all the best.

Kind regards,

(Your name)”

Should You Fire Your Wealth Advisor?

Change is often uncomfortable, but remind yourself why you wanted to fire your advisor in the first place. It’s better to take action than to complain for decades, or worse – be concerned about who is handling your wealth. 

If you are in the process of looking for a new advisor, have a look at our blog, How To Interview a Financial Advisor so that you can make the right choice.

Disclosure: This blog is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accounting, tax, legal or financial advisors. The observations of industry trends should not be read as recommendations for stocks or sectors.

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