“You’re fired!” …Those are never fun words to hear - or say. But sometimes, parting ways with a financial advisor becomes necessary.
Before rushing into a decision, here are a few thoughtful steps to take:
If something rubbed you the wrong way, give it a few days. Time helps ensure you’re not making a decision purely out of frustration.
Dig up the agreement you signed when becoming a client. It may outline how to formally end the relationship - such as requiring written notice, a waiting period, or even a termination fee (hopefully not the case).
That said, many advisors want to end the relationship on a good note and avoid additional problems, so they will waive any fine print in the client agreement.
If you’re planning to work with a new advisor:
If you’re going it alone, work directly with your custodian (Charles Schwab, Fidelity, Betterment, etc.) to:
Before making any changes:
Some advisor-client relationships last years - even decades. If you're ready to move on, consider a short phone call or kind email to close the chapter.
It’s not about justifying your choice - it’s about leaving on good terms. That’s what I’d hope for if I were in that position.
Ask for cost basis to transfer with your brokerage taxable investments. It’s essential for future tax reporting, and while it often is transferred automatically, some robo-advisors drag their feet. This can be an inconvenience to deal with and cause unnecessary tax surprises.
If your account has an unused line of credit - even if it’s never touched - you’ll need to remove it before initiating a transfer.
Some advisors use investments that can’t be moved elsewhere. These must be sold before transferring and may trigger taxes or time out of the market. Confirm first to avoid surprises.
Ending a relationship with your financial advisor is a big decision - but it doesn’t have to be stressful. With the right preparation and support, you can make a clean transition, whether that means switching advisors or taking things into your own hands.
“Tax evasion by millionaires and billionaires tops $150 billion a year, says IRS chief.”
As the IRS receives more funding, hopefully it’s used effectively - not just with more audits, but with updated technology (currently archaic) to better detect fraud and enforce the rules.
“You must be the change you wish to see in the world.” - Mahatma Gandhi
Ready to Take Off?
📩 Have a financial question? Visit The Financial Takeoff and our Ask a Question page.
🚀 Want to explore working together? Schedule your Initial Collaboration meeting to see what’s possible with your financial planning. We look forward to meeting you!
Life is short and time is precious. Thanks for taking yours to read this and I hope to be a part of your Financial Takeoff!
Disclaimer: This is just for informational purposes and should not be used or viewed as tax, legal, or financial advice. Work with your tax professional, legal professional, and financial planner to evaluate which strategies would be the best for your situation.
