Let’s be realistic. Advisers are no different than doctors, attorneys and other professionals. They switch firms; they change how and where they practice; they retire; and they die. If any of these events occur with your adviser, the financial services you receive could be impacted. If you are as self-determining as I am, you’ll want to know your options and be proactive when it happens.
 
Job/Firm Change: Within the financial industry, it is well-known, and not unusual, for a broker to leave one stock brokerage firm to join another (often, the adviser is recruited by a “headhunter” and given a substantial bonus to make the change). Before you jump ship to join the adviser at a new company, however, look out for yourself by getting answers to some basic questions. First, ask the adviser: Why are you making this change? Did you receive a bonus to switch? How much? Will the move provide any specific advantages to your clients? How will investment options and fees differ from those at the previous firm? Will there be pressure (or incentives) to sell the new firm’s products? Next, call the old firm and ask: Was the adviser fired or asked to leave? Who will be assigned to my account if I stay? What are his qualifications? Can I interview him?
 
Retirement: Yes, advisers get to retire, too! While my own personal plans have me working 25 more years, I know several local advisers who have just retired or who are in the process. Here, too, you’ll want to consider your own best options. Ask the adviser: Who is going to take over your clients? What are his qualifications and experience? Ask to meet with the person and treat it like an interview (you are the one doing the hiring).
 
Death: Sadly, some advisers’ careers are cut short by disability or death. Even if your adviser isn’t close to retirement, it is very wise to ask about his business succession plan. Heck, I don’t look a day over 46 and I still get asked about my plan! Good questions include: Who is the person who will take over? Who will own the firm? Are these folks already at the firm? Who is the custodian for client money? Just in case a tornado whisks away the adviser’s building (and everybody in it) to the Land of Oz, you need to know how to access your money!
 
Make Lemonade: If any of these unexpected events do occur, please know that: 1. If you are not comfortable, you are not obligated to stay – or leave a firm, 2. It is your money and you can take as much time as you need to figure out what you want to do next. Perhaps you’ll choose to get a 2nd opinion from another adviser. Getting a fresh perspective on your finances can be a big help. In fact, an adviser change could be a blessing, or “lemonade,” in disguise.

 

 

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David D. Holland, a CERTIFIED FINANCIAL PLANNER™ practitioner, hosts a weekday radio show at 9AM on AM1380 Ormond Beach, AM1230 New Smyrna Beach and AM1490 Deland. He has also authored two books in his Confessions of a Financial Planner series. Holland offers investment advice through Holland Advisory Services, Inc., a registered investment adviser in Ormond Beach. He can be contacted at (386) 671-7526. Email your financial questions to info@DavidHolland.com.