Like any relationship, it can be quite uncomfortable when you want to leave. Should you text, email, call, meet in person, or just ghost them?
No matter who you are breaking up with, some emotions are usually involved. This is especially true for most people who have decided it’s time to leave their financial advisor.
After all, money is an emotionally charged subject. And when you tie in the complexities of a relationship with someone who knows everything about your financial life, it can be challenging to know where to start.
But fear not; it’s not as hard as you think.
Follow these straightforward tips to break up with your financial advisor painlessly.
5 tips to comfortably move on from your financial advisor
1. Put things in perspective
Before taking action, remind yourself that this is merely a business decision. If it helps, remember that you are paying for a service. If the quality of financial advice is not up to par, it only makes sense to seek other options.
If that doesn’t help, compare your relationship with your financial advisor to the person who cuts your hair.
Would you keep going back if your barber or stylist repeatedly shaved a mohawk into your head instead of giving you the trim you asked for?
Of course not. You would find someone else that listens to your needs. It’s no different in an advisor-client relationship.
2. Notify them (on your terms)
While you don’t have to inform your advisor of your intention to leave technically, it’s a courteous gesture. Reach out in any way you feel comfortable.
Whether you send an email, place a call, or set up an in-person meeting, make sure to communicate your desire to end the relationship clearly.
In addition, it’s always a good idea to document everything so you have something in writing to reference should your request get delayed or ignored.
If you make a phone call or schedule an in-person meeting, make sure you walk away with something signed by you and your advisor via email or physical paper.
Here’s a simple example email you can send to your financial advisor to notify them you want to end the relationship:
Hi <Advisor’s Name>
I am reaching out to you for two reasons. Firstly, I want to express my gratitude for your valuable advice and guidance throughout the years. Secondly, I wanted to discuss the next steps in my financial journey. After careful consideration, I have decided to take a different direction. I will be transferring my account(s) to another institution that aligns better with my present and future needs. I wanted to inform you in advance as you will be receiving the transfer requests shortly. Thank you for your understanding and support during this transition.
Best regards,
<Your name>
3. Review the paperwork
Depending on your advisor’s contract, there may be fees and other requirements that need to be taken care of before you part ways.
For example, if they hold your assets in their own accounts instead of with a third-party custodian, you’ll have to close those accounts and move the money elsewhere. Make sure you double-check all the paperwork, as your agreement may not explicitly state these fees and requirements.
4. Reassess your financial situation
After you’ve left the advisor, take time to reevaluate your finances and determine if any changes need to be made. This would be an opportune time to bring in a new financial advisor to analyze your financial plan and make appropriate recommendations. Moreover, your new financial representative can help with the transfer of your accounts.
5. Look forward to having a better plan that meets your needs
Work closely with a dedicated advisor who is held to the highest standards, putting your best interest above all else. In doing so, you will benefit from having a holistic approach to your finances. A CFP® will help you build and manage a comprehensive financial plan that is tailored to your unique needs, goals, and timeline.
This can give you the peace of mind knowing that you're working with someone who has your best interests in mind. As an added benefit, you’ll also receive advice on non-financial matters such as insurance, estate planning, and taxes.
Final word
Taking the time to carefully consider and execute these steps will help ensure that ending the relationship with your advisor is done in an orderly and respectful manner. By following this process, you’ll be able to make the transition as smooth as possible and position yourself for success in the future.
And remember, while it may be difficult to say goodbye, cutting ties with your financial advisor is often a part of growing and managing your money more effectively. So don’t be afraid to move on if it’s what’s best for you. With some preparation and careful planning, you can confidently make the transition to your new (and improved) financial life.
