Four Signs That It’s Time to Let Your Financial Adviser Go

Choosing the right financial adviser is important because they can help you make smart decisions about your money and plan for the future. They can also give you advice on investing, saving for big goals and managing your finances. Plus, they can help you navigate all the complex financial unknowns and help you achieve confidence. It’s like having a knowledgeable friend to guide you through the money maze.

A solid relationship with your financial adviser is all about trust and understanding. When you have a good rapport, your adviser grasps your financial goals, your comfort level with risk and your personal situation and can, therefore, tailor their advice to fit specific needs and help you stay on track with your money goals. A one-on-one connection and an adviser who really listens to and understands your goals can be vital to a stress-free retirement.

This Morningstar article hits on the four main reasons I believe, based on my 20-plus years of experience, people switch advisers:

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• Lack of communication
• High fees
• Incompatible trading philosophy
• Poor performance

All of these are serious red flags that should prompt you to seek a new adviser. I know it’s scary to make a change, especially considering this is what you have worked your entire life to build. But it is scarier to maintain a relationship with an adviser who does not know you or truly understand your individual desires.

Signs of a disconnect

Many people feel like they are just another number to their firm. They are ushered in and promised many things and feel excited about what they are being told.

But once the money transfers, things change. You call in and need to speak to who you thought was your adviser, and you are shoved off to someone else, or the adviser never calls you back. You are brought in only once a year for a review, with very little interaction at other times.

Or maybe you have been with your adviser a long time, but the firm has decided to change philosophies, and it no longer aligns with what you initially agreed upon nor was this change communicated to you. Having good communication and feeling heard and understood in all relationships is key to success.

It is inexcusable for advisers to fail to return phone calls, shove clients off to someone else or not know what is going on with your financial health. Just like going to the doctor, if you have no clue what the course of treatment is, how can you get healthy? And if you are given a new doctor every time you go, how you can ever have the confidence that things are being managed properly?

What 'other' fees?

Fees should be expected. Obviously, no one works for free. But most advisers may not be fully transparent with the fees they are charging. Advisers may say they charge 1%, and this may be true for the advisory fee.

However, there are generally other fees that go to the financial institutions or portfolio managers, commissions and transaction fees.

Meeting with an independent adviser who can run a fee analysis can help give you confidence knowing that this is not happening to you.

Learn to say no

It is the adviser’s job to advise but not to dictate the philosophy. It’s important that your adviser understands your individuality and is willing to create a plan that fits you.

This is where I tell people that saying no is super important. I know it is hard to tell others no, and most will just avoid the conflict, but this is not the place to do that. There may be times that advisers push products and services that are more beneficial to them than to you. If you are not confident in what is being presented, say so. And if the adviser continues to push that and not give other options, find someone else.

This is going to be a long-term relationship, and if you don’t feel it’s a two-way relationship, it’s not worth continuing.

Red flags on results

Most people understand that in bad markets there is likely to be some loss. But consistent year-over-year losses that you are confused about or that you feel should have been different are huge red flags. If you see markets going up but you are not making money, or if you were promised one thing in a non-market-based product and you are not receiving what you were told, it is time for a second opinion. This is a conversation many try to avoid, but it is an important one to have in order to stay on track throughout retirement.

As you can see, even though there are four main reasons people switch, most of the reasons are ultimately related to relationships and communication. Making sure to build that one-on-one personal relationship with your financial adviser is key to good communication, which can lead to better understanding of your overall plan.

The ability to access the person handling your funds and truly knowing they understand your goals can leave you feeling much more secure. If you are the only one checking in — meaning that your adviser never calls you to make changes or see how you are feeling about your plan — this is a reason to seek someone who will make that time for you. In my 20 years of working in the financial industry, it is apparent to me that this is the biggest mistake advisers make.

Dan Dunkin contributed to this article.

The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.

Insurance products are offered through the insurance business Agape Wealth, LLC. Agape Wealth, LLC is also an Investment Advisory practice that offers products and services through AE Wealth Management, LLC (AEWM), a Registered Investment Advisor. AEWM does not offer insurance products.

The insurance products offered by Agape Wealth, LLC are not subject to Investment Advisor requirements. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions.

AE Wealth Management LLC provides services without regard to religious affiliation and the views of individual advisors are not necessarily the views of AE Wealth Management. 2271077 – 03/24

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