How to Break Up with Your Financial Advisor

Even the healthiest relationships can go stale without efforts from both sides to stay committed and attentive. The same is true for the relationship between a financial advisor and a client. People change, as do their circumstances, market conditions, and political climates. If the advisor you have cannot weather these changes and storms with you, it might be time to move on. The end of the year is a good time to reflect on the past year, those that came before it, and what lies ahead. If you feel something is lacking in your advisor’s communication, service level, or strategy that impacts your ability to achieve your goals, you owe it to yourself to see if there is a better match for you. Here’s how to respectfully break up with your financial advisor without guilt or hassle.

Think It Through

Before making a move, include your partner or spouse in the conversation, since changing advisors can impact shared financial goals. Review the existing advisory agreement for any termination terms, obligations, or notice requirements. Analyze the structure of the accounts and investments to decide whether it makes sense to transfer everything or leave certain assets with your current advisor.

Weigh Your Options

A successful transition starts with a clear plan. Pinpoint what is missing in your current relationship and clarify your expectations for your new advisor. Meeting with several prospective advisors will help provide insight into the various planning approaches, compensation models, and available investment solutions. In-person conversations also help determine alignment in communication style, values, and overall philosophy. The right advisor will be equipped to implement your goals and guide the transfer of your assets from your previous firm.

Share the Decision

In most cases, a written notice, by email or letter, is sufficient to terminate the advisory relationship. Ideally, you would first raise your concerns directly with your advisor to allow for a chance at resolution. If that conversation fails to address the issues, termination should not come as a surprise. It’s not required, but a professional follow-up discussion about the account transfer can help to smooth the process and maintain goodwill.  

Understand Fees, Restrictions, and Potential Penalties

Depending on your comfort level, you can choose whether to initiate the process with your current financial institution or allow the new advisor to manage the transition. In either case, you should prepare for possible costs associated with closing and moving accounts. These may include termination fees outlined in advisory contracts, transaction commissions from liquidating investments, or charges tied to proprietary products that cannot be transferred. Some mutual funds also impose short-term redemption fees for early sales.

Move the Assets

The most efficient way to move investments between firms is through the Automated Customer Account Transfer Service (ACATS). If the accounts are eligible, the new advisor can initiate the electronic transfer, enabling securities to move directly between institutions. This standardized system streamlines settlements, usually avoids transfer fees, preserves original cost-basis information, and minimizes market exposure by keeping investments intact throughout the process. 

Safeguard Your Documentation

For tax reporting and verification purposes, you should obtain copies of all account statements, transaction history, and supporting records. Most institutions have a portal that allows clients to download their documents. However, timing is important as access may be limited or prohibited after account termination. While advisors are legally required to transfer client records, the process can take time. You should confirm how long your former institution retains personal data after the transfer completes.

Why Investors Change Advisors

Switching advisors is common, especially among high-net-worth (HNW) individuals. A PWC survey found that 46% of HNW investors planned to add or change wealth management firms within 12 to 24 months, and 39% reported having already switched or added providers. Some reasons investors seek new advisor relationships include:

• A desire for personalized and holistic wealth management
• A shift in priorities or a major life event
• Performance anxiety due to a misunderstanding of market volatility
• Unhappiness with returns
• Infrequent or inadequate provider communication
• Feeling unheard about needs and goals
• Unexplained or high fees

Ending a financial relationship may seem hard, especially if it’s long-standing. But change can bring clarity, momentum, and new opportunities. SHP Financial offers comprehensive wealth planning services, including income, tax, investment, healthcare, and legacy planning tailored to you and your objectives. If you are ready to move forward with confidence and find your ideal wealth-planning partner, don’t wait another year. Take the next step toward financial freedom and schedule a complimentary review with an SHP advisor today.