If you’re considering changing financial advisors, follow these three steps for a smooth transition. First, keep in mind that it’s a business decision, not a personal one. Second, while your new advisor will handle much of the transition, it’s courteous to send your current advisor a farewell email thanking them for their services. Lastly, ensure a prompt transfer out of your accounts. This prevents your old firm from having to manage a dormant account, which they prefer to avoid.
You see it all the time. HENRYs (High Earners, Not Rich Yet) go through our 4-5 week ARC Wealth Plan, all fired up. But when it comes to parting ways with their current financial advisor, they get cold feet. It’s like when your favorite team is on the verge of a big trade but hesitates at the last minute.
Now, it’s not exactly common for a HENRY to even have a financial advisor, but some do. Maybe you got hooked up through family connections, or your advisor was a buddy trying to make a name for themselves in the biz.
But let’s be real, most big downtown firms won’t even glance your way unless you’re packing some serious cash. And even if you are, you’re just another face in the crowd to them – they’ll take your money, throw it into some stocks, and that’s about it. They’ll label you a D-list client. If this sounds familiar, here’s how to make a clean break from your financial advisor.
REMEMBER, IT’S BUSINESS
First off, let’s get one thing straight – it’s all about business. Your financial advisor is in this game to make money, same as you… You don’t owe them anything. So if you’re feeling like it’s time to move on, trust your instincts. Maybe they’re not giving you the attention you need, or maybe their financial plans are about as creative as a pregame show. And don’t worry about hurting their feelings, they are used to clients leaving for a multitude of reasons. It’s just business, nothing personal.
Lastly, and without intending any offense, your departure might actually come as a relief to them. In large firms, management often advises Financial Advisors to part ways with clients considered to be in the “bottom tier” of their book. By leaving, you spare them the logistical hassle of transitioning your account to a team better suited to your specific needs, which is essentially industry jargon for passing you on to an advisor who handles smaller accounts.
RIP THE BAND-AID (AKA SEND THEM A GOODBYE EMAIL)
Time to rip off that Band-Aid. Shoot your advisor a quick email or give ’em a call to let ’em know you’re heading elsewhere. Your new advisor will handle all the details of shifting your accounts. Here’s a template to get you started:
“Hey <Advisor’s Name> –
Just wanted to drop you a line to say thanks for all your help. However, I’ve decided to take my account(s) elsewhere to better align with my financial goals. You’ll be getting transfer requests soon.
Take care,
<Your name>”
Note, if don’t have a specific advisor at your current bank or firm, you can avoid this step.
TRANSFER OUT
Once you’ve given your advisor the heads-up, it’s time to make moves. Your new advisor will handle the heavy lifting of shifting your accounts, usually within a couple of weeks. Remember, it’s your money, so don’t hesitate to do what’s best for you. Like a trade deadline deal, sometimes you gotta shake things up to get the results you want.