How to fire your financial advisor
Ending a relationship, no matter what kind, is never easy. It can be very uncomfortable and for many people, it’s something they just avoid altogether. But, once you have made the decision that you should fire your financial 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 Financial Advisor. Regardless of the reason, here are some tips on how to go about firing your advisor.
1. Review your contract
The first 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 (are you liable for the rest of the period, can you pay a penalty to exit early? and your transfer fees (what it costs to transfer investments). Once you know what steps you need to take, and how much you will be charged, you can begin the process.
2. Decide what you are going to do once you leave this advisor
Are you planning on managing your own money? Or are you hiring a new advisor? If you are going 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. 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 going forward. I wanted to notify you as you should be receiving the transfer requests shortly.
I wish you all the best,
4. Get a copy of your transaction history
Again, if you have hired a new advisor they can request this from your old advisor, but if not, remember to ask for a copy of all transactions between you and the advisor. This helps your new advisor to get a clear picture of your history and assist in planning the route forward.
Change is often uncomfortable, but remind yourself why you wanted to fire your advisor. It’s better to take action than to complain for decades!
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.
*All investing is subject to risk, including the possible loss of the money you invest. **The projections or other information generated by Zoe Financial, Inc. regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.