Future Considerations after Selecting a Financial Advisor

Planners sometimes change firms, and that leaves you trying to decide whether you want to go with them. Truth be told, it depends on the circumstances and on what you expect to happen if you stay or go.

Start by asking your advisor about the reasons for the change. If she is moving from one firm to the next, do a background check on the new employer. While you are doing that check, you might want to recheck your advisor.

I know that sounds strange, given that your advisor has done nothing to make you scared, but one reason why a planner might jump to a new firm is that the old one has shown her the door when she played fast and loose with the rules. The planner is not likely to tell you that happened, so make the check while you are investigating the new advisory firm just to be safe.

If you decide to follow the planner, find out if he or she gets a bonus for bringing over new customers. Also find out who pays any transfer fees involved or whether you might incur taxes because you'd be forced to sell some investments to follow along (which could happen if you have to sell out of the "house funds" run by the advisor's old firm).

If you choose not to follow your advisor, your current firm will give you someone as a replacement. While you can make the assumption that the firm will not give you a bumpkin, you need to start the interview and background-check process over again. You may find that the new advisor is technically proficient, but not a good personality match for you and your family. If there is any uncertainty, be prepared to interview other candidates and commit yourself to going through the complete hiring process all over again.

By Chuck Jaffe
Chuck Jaffe is a senior columnist and host of two weekly podcasts at MarkWatch. He has also been a guest speaker on several television and radio shows.

Copyrighted 2020. Content published with author's permission.

Posted in ...