Poor performance, high fees, strained communication and stagnant advice are among the reasons to look for a new advisor.
When it comes to your financial advisor, breaking up can be hard to do.
While performance of your retirement fund or savings over time is an obvious metric by which to judge your financial advisor, the relationship often ends for more emotional reasons. Here are some signs it’s time to cross your financial advisor off your Valentine’s Day card list.
1. You’re afraid to call your financial advisor
If you’re having trouble picking up the phone to ask a financial question, that’s a bad sign. “If you’re not calling because you don’t think your concerns are important, or you feel like, ‘they’re too busy — I don’t want to bother them,’ those are big red flags.
Ask yourself, why are you afraid to call? If past calls weren’t promptly returned, or the conversation felt rushed once you connected, then it may be time to examine whether this is working out. “Some may feel like they are small potatoes compared to their advisor’s other [wealthier] clients … but you shouldn’t feel that’s a problem, This is all your money and that deserves their full attention.
2. Your financial advisor doesn’t listen to you
"I make requests and suggestions, but he just brushes me off",
Often, clients can be overawed by a fancy suit and office, and a barrage of smart-sounding advice that goes right over their heads. “It’s kind of like, ‘don’t question the doctor, just take the prescription. Your advisor works for you and has a duty of care to listen to your needs, explain his advice and act upon your wishes.
3. Your financial situation is changing, but the advice isn’t.
Similar to not hearing you is not changing financial tack when a major life event is on the horizon, such as retirement. Some advisors get stuck in “accumulation phase,” rather than preparing for the time when your investment savings replace a steady paycheck.
“You’ve been saving all this money, but it’s in different pots of money — some may be in taxable accounts, maybe you’re remarried and you’ve got his-and-her money, “How do you decide what to take out, when, and in what order should the accounts be used? Those become the big questions now.”
4. Your financial advisor only calls to trade
Another red flag: You only hear from your advisor when they want to execute a buy or sell order on your portfolio. That may be a sign your advisor is only interested in the fees they may pocket by trading on your account,
It’s important to understand how your current or future advisor makes money. Some make money by receiving a commission on products they sell; others charge clients a percentage of the assets they manage (typically around 1%). Many clients prefer a fee-only advisor, who charges an hourly rate or a flat fee for services, and isn’t inclined to steer you toward a fund they get additional cash to sell.
If you feel your advisor is only looking to make a quick buck off you, it may be time to say so long.
5. Your eye is already wandering
If you find yourself listening to other financial advice, or looking at your advisor contract with a critical eye, you’re probably ready to make a break.
Emotionally, breaking up with a financial advisor or financial consultant may be hard to do. Legally, switching financial advisors is pretty straightforward: Sign an agreement with your new firm, and you don't even need to notify your old advisor. If you’re not feeling fulfilled in your current advisor relationship, remember: You can always leave.
To review and get a second opinion on your financial situation or should you have any questions, then please get in touch.
Rob
T: (+6) 011 51565649 E: robert.gourlay@holbornassets.com W:www.rgwealthsolutions.com
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