So your financial advisor isn’t returning your phone calls, listening to your concerns, or meeting financial benchmarks? Those are all signs that you might have to kick him or her to the curb.
A good financial advisor helps you develop a plan to achieve your monetary goals, listens to your needs, and communicates clearly. If you’re unhappy with your financial planner, first determine why you’re angry. Are your issues caused by your financial advisor or some other factor?
There are many reasons why you might want to ditch your advisor. Here are a few signs that you may need to move on:
Your advisor doesn’t have the right credentials
Wouldn’t you be hesitant to have an inexperienced contractor build your dream house? In the same way, a financial advisor should have the proper credentials and experience to handle your finances. The highest credential a financial advisor can have is a CFP accreditation, which means he or she has met rigorous professional standards and has “agreed to adhere to the principles of integrity, objectivity, competence, fairness, confidentiality, professionalism and diligence when dealing with clients.” A certified financial planner will have studied and passed exams on issues like investing, retirement and taxes.
Your financial planner might have other designations, such as a CFA or ChFC. Research to find out what your advisor’s designations mean. And during your initial interview, be sure to ask any financial questions you might have to get a sense of who they are. If they don’t have the right certifications, search for someone new.
Your financial goals aren’t being met
Are you making any progress meeting your financial goals? Is everything moving forward as planned? Is there even a written plan? If you aren’t on the right track, find out why. Yes, returns may vary from one year to another. But you should have some expectation that your investments will meet certain benchmarks. If you’re consistently underperforming, it’s not a good sign.
He or she isn’t paying attention to you
Do you have a hard time getting your advisor to sit down for a one-on-one talk? Is he or she behaving differently from when you were first being courted? If your advisor is barely returning your phone calls or seems aloof, it might be time to find someone new. Your advisor is supposed to give you a certain amount of attention — and if you are unhappy with the time they are devoting to you, move on.
You’re not into each other
Sometimes you may not connect with your advisor. Can he or she name your investment objects and risk tolerance? If not, that’s a bad sign. Sometimes your advisor doesn’t listen to what you want. Because you are relying on this person to help guide you to financial success, it’s imperative that you have some amount of trust in him or her.
Maybe you’ve outgrown each other. Let’s say you’re having kids and want to change the focus of your investments. If your advisor doesn’t have expertise in your new areas of interest, it’s time to get a new one. And then you might just simply dislike him or her. Chemistry is important, so make sure that you have a good working relationship. Whatever the reason, if you’re no longer into your advisor, don’t just keep him or her around because of laziness or complacency. Give them the heave-ho.
If you have trouble understanding your adviser or can’t communicate with him or her, it’s time to go. Your advisor should never make you feel dumb or talk in gobbledygook. After all, he or she is dealing with your money. If you’re constantly confused by the words coming out of your advisor’s mouth, tell him or her and ask for clarification or to explain things in layman’s terms. If you’re still confused, it’s time to get a new advisor.
They’re full of sales pitches
If your advisor constantly recommends trades or investments that aren’t really in your best interest, that’s a bad sign. Why is he or she trying to pitch expensive or exotic products to you? Because your advisor is handling your money, make sure that he or she knows your interests and suggests moves based on your goals — not his or her payout. If your advisor talks more than he or she listens, be wary.
There’s too much turnover
A lot of employee turnover is a sign that something may be wrong at your advisor’s company. Businesses certainly go through change, but constant change is a red flag. A revolving door means you might have to start over with each new planner, which doesn’t allow you to build history or trust easily.
If you ultimately decide to break up, here are a few things you should remember to do:
- Decide what you’re going to do with your money — hire another advisor or handle the money on your own? If you’re looking for a new advisor, a good place to start is the National Association of Personal Financial Advisors.
- Retrieve any records or estate documents — look at your latest statement to make sure nothing is lost in a transfer of holdings.
- Decide how you are going to notify your advisor of the separation — whether it’s via email, phone, or in-person really depends on the type of relationship you have with him or her.
- Look at the tax consequences — if you’re hiring a new planner, he or she may need to fill out paperwork to transfer money to a new brokerage and that might mean you’ll have to pay taxes.