October 3, 2023 • 19 mins
In this episode James explores signs that may indicate it's time to move on from a current financial advisor and discusses the professional and respectful ways to handle this transition. There are three core aspects to consider when contemplating the change:
Deciding to Leave:
The first step involves recognizing signs that it may be time to move on.
Telling Your Advisor:
James provides two scripts for notifying your financial advisor about your decision.
Handling Logistics:
After the decision to switch advisors is made, there are several logistical considerations.
James highlights that making the decision to switch advisors can be emotionally challenging, but ultimately, it's a crucial step in securing your financial future.
Questions Answered:
How do you decide if it's time to leave your financial advisor?
What's the best way to tell them that you're leaving?
How do you handle the logistics?
Show notes links:
When Should You Work with a Financial Advisor?
https://www.youtube.com/watch?v=1V1X-dovlF4
Script: Break up with your Financial Advisor
https://docs.google.com/document/d/1IwYM5DDcvm0FEtkc99Lf9sy840wmGfhLm62-o7NmMpg/edit
Timestamps:
0:00 Intro
1:18 How to decide
7:00 How to tell them
8:10 Script 1
9:09 Script 2
11:03 Script 3
15:28 The logistics
17:54 Outro
Create Your Custom Strategy ⬇️
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Have you ever wondered if it's time to fire
your financial advisor?
Maybe you have, but you're notsure how to do it politely or
respectfully.
Or maybe you don't even knowwhat that process looks like
without making a mess of allyour different accounts.
Well, in this episode we'regoing to discuss the signs that
it's time to move on from yourfinancial advisor, and how to do
it in a professional andrespectful way.
We'll also talk about what tolook for in a new advisor and
(00:20):
how to make that transition assmooth as possible.
So, whether you're feeling likeyou're not getting the advice
you need, or if you're simplynot comfortable with your
advisor style, this episode isfor you and I'm going to give
you the tools and knowledge youneed to make a confident
decision about your financialfuture.
This is another episode ofReady for Retirement.
I'm your host, james Cannell,and I'm here to teach you how to
(00:41):
get the most out of life withyour money.
And now on to the episode.
If you're considering breakingup or leaving your financial
advisor to transfer elsewhere,there's really three core things
that you need to be aware of orbe thinking through as you make
that decision.
Number one how do you decide ifit's even time to leave your
financial advisor.
(01:02):
So we'll address that.
Number two what's the best wayto tell them that you're leaving
?
And then number three how doyou actually handle the
logistics?
In some cases, it may be simple.
In other cases there may besome details that you need to be
aware of.
So that's what we're going tofocus today's episode on.
Now, to start, how do you decide?
How do you know if it's time toleave your financial advisor?
(01:23):
Some of you listening may sayJames, I just know it's time.
This is a feeling I've beenhaving for some time now and I
just need to make the move intoit.
Other of us of you might bethinking you know, I don't
really know.
I feel like there's someservices, maybe they're a nice
guy or nice gal, but I justdon't feel like something's
completely there or something'smissing.
Well, to me, there's sometelltale signs that it is time
(01:45):
to move on from your financialadvisor.
I actually recorded a video ofthis on YouTube.
The video is called when Shouldyou Work With a Financial
Advisor, but a large part ofthat video is actually when
Should you Change or even Fireyour financial advisor.
I'm going to include a link tothat on the show notes.
So if you're listening to thison Apple or Spotify or whatever
it is, check out the show notes.
There's going to be a link tothat YouTube video where I
(02:06):
flushed that out much moredetail.
Here's just a summary, though, afew basic things.
If any time you ask yourfinancial advisor tax question,
they say ask your CPA, it mightbe time to move on from your
financial advisor.
If your financial advisor isnot providing tax advice and
you're preparing or already inretirement, you're missing a
huge component of what a goodfinancial plan should do.
Another reason is if you don'thear from them ever there's no
(02:29):
proactive reachouts to schedulemeetings, there's no informative
emails to keep you up to dateon various things, there's no
resources like podcasts orvideos that they're making.
If you're not getting some typeof consistent feedback or
communication from them, itmight be time to move on.
One key role of a financialadvisor is to keep you informed
and to keep you updated andeducated to ensure that you're
(02:49):
constantly making the bestfinancial decisions for you.
Another reason is if you have awhole bunch of planning points,
maybe do meet with yourfinancial advisor.
They say this is what we needto do.
We need to do X, y and Z, andthen X, y and Z have a tendency
to start falling through thecracks.
You need to have someone that'sproactive in doing things, so
if something says it's going toget done, you have full
(03:10):
confidence that that's actuallybeing implemented on your behalf
.
So I go through things likethat and more in the video.
So again, check that out in theshow notes, where I walk
through that in more detail andgive you other examples.
But the first thing that youneed to do is decide is it time
to move on from my financialadvisor?
And here's the thing that Iencourage people to do.
And actually, before I jumpinto that high level, some
(03:32):
people might see this podcastand say, well, that's kind of a
silly episode.
How to break up with yourfinancial advisor.
You just do it.
Well, it may seem that way, itmay seem fully rational, but I
can't tell you how many peopleI've spoken with, who.
They talked to us.
They knew that what we offeredwas superior to what they're
currently getting.
They knew the service was goingto be better.
They knew the planningopportunities were going to be
(03:52):
broader, but they couldn't bringthemselves to leave their
existing advisor and that's achallenge.
For a lot of people, it's likebreaking up with someone.
Oftentimes, this is someone youeither know personally or have
gotten to know over years ofworking with them.
It's not easy simply to leavethem.
So here's what I encouragepeople to do in many different
areas of their life, not justwhen it comes to their
(04:12):
conversations or discussionswith their financial advisor is
try to make decisions as yourfuture self, as opposed to your
current self.
There's an author named BenjaminHardy who I really like, and
he's an author that talks a lotabout this of how can we make
decisions to the framework ofyour future self, because
there's always this tensionbetween who you are today and
(04:33):
who you're going to be in thefuture, and oftentimes things
that we know are going to begood for us in the long term
that could be working out, thatcould be saving for retirement,
that could be breaking up withyour financial advisor we don't
do them, and it's because, froma psychological perspective, we
view our future selves as acompletely different person than
our current selves, and so whenwe're thinking of these things,
(04:54):
we think, okay, well, that'sgood for future me, but future
me is almost an entirelydifferent person.
And because that disconnectbecause we don't fully connect
with who our future self is.
We make decisions in which weprioritize our current comfort.
We make decisions thatprioritize not rocking the boat
or doing anything scary today,even if we know it's better for
(05:15):
our future selves.
So if we don't check this, thenthis keeps us in our comfort
zone.
It keeps us doing things thatbring us comfort and avoiding
the things that bring usdiscomfort.
Now, firing your financialadvisor isn't going to be a
source of a lot of psychologicalpapers, but the principle
applies.
Like I said, I've spoken withso many people who couldn't move
forward with an approach theyknew was better for them because
(05:36):
it was too difficult for theircurrent selves to do so, because
it required discomfort, eventhough they knew their future
self would benefit greatly bysome of the things that we're
talking about doing.
Hey everyone, it's me again forthe disclaimer.
Please be smart about this.
Before doing anything, pleasebe sure to consult with your tax
planner or financial planner.
(05:56):
Nothing in this podcast shouldbe construed as investment, tax,
legal or other financial advice.
It is for informationalpurposes only.
Another quote that I like aboutthis is Naval Ravikant.
He has a quote that says andhe's talking about decisions in
general.
But he says, quote if you're50-50 about a decision, then
you're overweighing the comfortof staying where you are, end
(06:17):
quote.
In other words, if you thinkyou're 50-50, you're really not
50-50.
You're lying to yourself andyour brain is tricking you into
saying you know what, this isjust as good.
This current solution is justas good as the alternative.
It's kind of 50-50.
No, your brain is lying.
It might be more like a 40-60or 30-70, but your brain is
tricking you and prioritizingcurrent comfort as opposed to
(06:40):
doing what's best for yourfuture self.
So if we can recognize thatabout our decisions and we can
prioritize the thing that'sgoing to be better for future us
as opposed to current us, we'regoing to make better decisions
as a whole.
So not to get too psychologicalabout what seems like a very
simple topic, but these sameprinciples apply with this type
of decision, which is difficultfor many people.
(07:00):
So once you know that you'regoing to fire your financial
advisor, how do you actually goabout telling them?
Well, in this case I would sayit depends a lot on the
relationship, because in mostcases you don't actually have to
tell them.
Your advisor, in most cases,doesn't control your account and
you can move it at any time.
So, for example, if you have afinancial advisor and they use
Charles Schwab as a custodianand you say, you know what, I
(07:22):
really just don't need afinancial advisor anymore, well,
you could simply remove yourfinancial advisor from the
account and it becomes yours.
Or maybe you want to transferto a different financial advisor
who uses fidelity as acustodian?
Well, your current financialadvisor at Fidelity, they could
sign the paperwork.
Or have you sign the paperwork,I should say, to initiate the
transfer.
That just gets sent to Schwab'sback office.
(07:43):
Then all your assets move inkind to Fidelity, assuming
they're non-proprietary assets.
So there's really not a need to.
From a logistical standpoint,it's more of a respect thing or
a hey, thank you for your helpover the years, type of a thing
that you do to be polite andnotify, but it's not a
requirement.
So, that being said, there'snot a rule book for how you have
(08:04):
to notify your advisor.
It more comes down to what yourrelationship with them is like
and I would say, in general,there's three options.
Number one if you're firingyour advisor and saying work
with another advisor or justdoing things on your own, first
option is don't tell them andjust do the transfer.
So this is really, if you haveno relationship with your
advisor, or if you know they'relikely to be unpleasant if you
do tell them, or there's justsomething that you don't want to
(08:26):
communicate with them about,maybe something bad happened
Well, you don't have to tellthem.
You can simply transfer.
So option number one is justmove away, set up new account
somewhere else and transfer yourassets and kind over.
Or in the case, like Imentioned before, maybe your
accounts are already at Schwabor Fidelity or a custodian like
that, you can simply requestthat your advisor be removed
(08:47):
from the account.
Your advisor never owns theaccount.
You always own the account, andwhen you're working with an
advisor, they have somethingcalled limited power of attorney
to make trades and manage theaccount on your behalf, but
you're the owner.
So anytime you could go to thatinstitution and simply have
your advisor removed and thenthe account simply becomes yours
.
So that's option number onedon't tell them and just
(09:08):
transfer.
Number two is you could sendthem an email.
Now I'm actually going toprovide some scripts in just a
second.
I'll read them off to you, butI'm also going to include a link
to these just a Google drivefolder that's in the show notes
that you can access.
You can send them an email justto notify them.
Hey, thank you for everything.
I found a new advisor I'm goingto transfer.
And then the third option andthis is if you tend to have a
(09:29):
much closer relationship withthem or just feel be the most
respectful thing to do, is youcould give them a call, call
them, say thank you foreverything, but we're moving in
a different direction.
You can even use the emailscripts that I'm providing in
the link below as a general kindof talking points and customize
them to your specific situation.
But a phone call just to notifythem and say thank you and I'm
moving on.
So I'm going to read to youthese scripts.
(09:51):
These are available, so go tothe show notes and you can just
download these and use them andcustomize them as needed.
But here's the scripts that Ihave that I send prospects
occasionally when they'redeciding to work with us but
don't know exactly how to breakup with their existing advisor.
So there's two scripts here,and that's not to say there's
only two reasons to break upwith your current financial
advisor, but the first of thesescripts is based upon a prospect
(10:14):
, maybe wanting to go to afinancial advisor that's
offering more services.
So the script is this dearfinancial advisor's name, I hope
you are well.
I'm writing to you today to letyou know that I've decided to
work with a new financialadvisor.
I want to start by thanking youfor all of your help over the
years.
You've been a valuable asset tous and will be forever grateful
for your guidance and expertise.
(10:34):
As you know, we're approachingretirement.
This is a big change for us andwe're looking for a financial
advisor who can provide morecomprehensive services that meet
our unique needs as we shiftfrom our accumulation phase into
retirement.
We're specifically looking foran advisor who can help with the
following Number one taxstrategies.
I want to make sure we'reminimizing our lifetime tax
payments through a coordinatedtax strategy.
(10:55):
Number two efficient spendingstrategies.
We want to make sure that we'redrawing down our portfolio in a
way that maximizes ourretirement income.
Number three an overallfinancial review to ensure that
we feel a hundred percentconfident in our retirement
decisions.
We've done a lot of researchand we've engaged a new
financial advisor who we foundto be a good fit for us.
They'll be initiating transfersfrom insert your financial
(11:16):
institution name to completethis process.
Again, thank you for all ofyour help over the years.
We wish you all the best in thefuture.
End of the script.
Now, what you want to do, youdon't have to use these words
exactly, but the generalapproach is thank you, advisor,
for your help and your servicesover the years.
Make it very clear.
We've made our decision andwe're going to go in a different
(11:37):
direction.
Here's the reasons we're doingso.
Again, thank you for yourservices.
What you want to avoid doing isleave it open or leave it
ambiguous or a little bit vagueof are you transferring?
Are you not transferring?
Are you trying to ask if we cantalk about it?
Make it very clear, but do soin a respectful manner.
So that's the first script.
The second script is morefocused on wanting a team that's
(12:00):
going to maybe provide morelongevity for you.
So a lot of people they come tous and say, hey, we actually
don't mind our advisor.
We think that James, you andRoot will provide better
services, but our currentadvisor is fine.
It's just.
The bigger reason is ourcurrent advisor might not be
retiring that much later than weretire, so we don't want to
have to make this decision tofind a new advisor in five years
or 10 years.
(12:20):
We want to know that we'reworking with a team that's going
to be with us through theduration of our retirement, and
we want to do it now, when wecan make the decision that's
best for us, when we have ourhealth and our mental faculties
in the capacity to make theright decision.
So here's that script.
Dear financial advisor, I'mwriting to you today to let you
know we've decided to changefinancial advisors.
(12:41):
I know this may come as asurprise, but we've given it a
lot of thought and we believeit's the best decision for us at
this time.
We want to start by thankingyou for all of your help over
the years.
You've been a valuable asset tous and we have nothing but
gratitude for your guidance andexpertise.
As you know, we are retiringsoon.
We've decided that we want towork with a financial advisor
who is younger than us, but wedon't have to make the decision
(13:02):
to change advisors later in life, when you may ultimately decide
to retire.
We've done a lot of researchand we've engaged a new
financial advisor who we foundto be a good fit for us.
They're in contact with Insertfinancial institution name to
make the necessary changes onour accounts.
Again, thank you for all yourhelp over the years.
We wish you all the best in thefuture.
So, as you can see again, thisis very clear, not ambiguous.
(13:25):
We've clearly made our decision.
But we want to thank you forthe time that you've put into
our relationship over the years.
And this is for people whorealize they're smart about this
that your financial advisor isnot going to work forever.
Now, when you're looking atthis, let's say your advisor is
60 and you're 65, maybe they dowork another seven, eight years,
but at that point they'reeither going to sell the
(13:45):
business to another advisor whoyou may or may not have a
relationship with they may sellto a private equity firm, so you
almost certainly wouldn't havea relationship with whatever
advisor you get assigned with atthat point or they may simply
just disband the business andthat's pretty rare, but some
advisors simply coast until theykind of gradually lose clients
and then they finally just saythe business is shutting down.
So as you look at those options, unless there's a really strong
(14:09):
, clear internal succession planin place, you may not have much
say over who your next advisoris in seven, eight, nine years
once your current advisorretires.
So a lot of people want to getahead of that.
They either want to know fromtheir advisor who exactly am I
going to be working with whenyou retire, or they want to make
the decision now to say who'sthe right team for us, not just
(14:31):
for the next five years or even10 years, but next 20, 30 plus
years.
So those scripts are in theshow notes and those are
templates that you can use asyou're having the conversation.
So, to summarize, step numberone is how do you know when it's
time to leave your advisor?
Step number two is how do youactually have that conversation
or actually implement that leavefrom your advisor?
Step number three is what doyou actually do logistically?
(14:53):
Well, number one notify them.
You're terminating therelationship, first and foremost
.
But number two, the secondthing in your new advisor should
be able to help you with this,because sometimes it's awkward
to do it with the advisor thatyou just fired.
But your new advisor can helpyou understand.
Are there any proprietary fundsthat you might hold with your
current advisor that would haveany trouble transferring to a
new institution?
(15:13):
Your new advisor should be ableto tell you that In many cases
the answer is no.
Everything just comes over veryeasily.
But in some cases they mightsay, hey, you need to sell that
fund or this fund can't transfer, this needs to be liquidated
first.
But they can walk you throughthat process.
The step three, the third partof this, is are there any life
insurance contracts or annuitiesor non managed accounts that
(15:34):
you also need to make suretransfer?
Let's keep this really simpleand assume you have one IRA that
you had an advisor managing andyou're going to transfer to a
new financial advisor.
So you open up a new IRA atyour new financial advisors
institution, you transfer overyour old IRA, anything you're
good until you realize, oh, mygoodness, the old advisor also
(15:55):
sold me a life insurance policyat some point and oh, you know
what I forgot.
But the old advisor, there's anannuity contract I have through
them or there's some other typeof product that I have through
them.
So just doing a full checklistto see are there other products
that that advisor is listed asthe advisor on, and do those
also need to transfer?
Not necessarily change them,but simply have a new advisor of
(16:18):
record or new institution ofrecord on them to ensure they
can still be tracked for you.
And then the fourth thing thatyou would do is this more of a
privacy thing is many advisorshave portals, myself included.
So when clients are workingwith us, they have a portal they
can log into.
They can see all their accounts, the institutions that we're
managing.
They can also connect outsideaccounts.
So maybe they have a 401kthrough work or maybe they have
(16:42):
kind of like a play money fundon the side, or maybe they have
whatever the case might be, amortgage linked in, bank
accounts linked in.
Well, you probably don't wantyour old advisor that you fired
to still have access to allthose different things.
So go into your portal ifyou're going to be transferring
away from the advisor, unlink ordelete all of your connections
and then request that theadvisor deletes your portal as
(17:04):
well.
So making sure all history istaken care of, everything's
deleted, so you don't have anylive links that are continuing
to go into your old advisor'sprogram even though you're no
longer with them.
So those are the basic steps.
As easy as it might sound,sometimes there's some
difficulties emotionally leavingyour advisor and there are also
some logistical things that youneed to make sure you're taken
(17:25):
care of.
But if you can follow the stepsthat we laid out today, you
should be in a good position.
But many times, the hardestpart about moving in the right
direction you know is right foryou is just making that
difficult decision to part wayswith someone who is with you
along the way.
But what I encourage everyoneto do is look at your finances.
This isn't just an IRA, thisisn't just a brokerage account.
This isn't just a Roth.
(17:45):
This is really your financialfuture and your financial
security.
What decision would future youmake when it comes to doing
what's best for you?
So that is it for today'sepisode.
Hope you like that.
Hope that was helpful.
If you're enjoying this podcast,I always appreciate it when you
leave reviews.
It does help more people to findthis podcast so more people can
get valuable information asthey're preparing for their
(18:07):
retirement, and also check usout on YouTube.
The channel name is JamesCannell Cannell C-O-N-O-L-E.
Search for that on YouTubewhere you'll find this episode
as well as many other videosthat help you to create a more
secure retirement so you canultimately get the most out of
life with your money.
That's it for today.
Thank you for listening andI'll see you all next time.
(18:27):
Thank you for listening toanother episode of the Ready for
Retirement podcast.
If you want to see how RootFinancial can help you implement
the techniques I discussed inthis podcast, then go to
rootfinancialpartnerscom andclick Start here, where you can
schedule a call to one of ouradvisors.
We work with clients all overthe country and we love the
opportunity to speak with youabout your goals and how we
might be able to help.
And please remember nothing wediscuss in this podcast is
(18:50):
intended to serve as advice.
You should always consult afinancial, legal or tax
professional who's familiar withyour unique circumstances
before making any financialdecisions.
Have you ever wondered if it's time to fire
your financial advisor?
Maybe you have, but you're notsure how to do it politely or
respectfully.
Or maybe you don't even knowwhat that process looks like
without making a mess of allyour different accounts.
Well, in this episode we'regoing to discuss the signs that
it's time to move on from yourfinancial advisor, and how to do
it in a professional andrespectful way.
We'll also talk about what tolook for in a new advisor and
(00:20):
how to make that transition assmooth as possible.
So, whether you're feeling likeyou're not getting the advice
you need, or if you're simplynot comfortable with your
advisor style, this episode isfor you and I'm going to give
you the tools and knowledge youneed to make a confident
decision about your financialfuture.
This is another episode ofReady for Retirement.
I'm your host, james Cannell,and I'm here to teach you how to
(00:41):
get the most out of life withyour money.
And now on to the episode.
If you're considering breakingup or leaving your financial
advisor to transfer elsewhere,there's really three core things
that you need to be aware of orbe thinking through as you make
that decision.
Number one how do you decide ifit's even time to leave your
financial advisor.
(01:02):
So we'll address that.
Number two what's the best wayto tell them that you're leaving
?
And then number three how doyou actually handle the
logistics?
In some cases, it may be simple.
In other cases there may besome details that you need to be
aware of.
So that's what we're going tofocus today's episode on.
Now, to start, how do you decide?
How do you know if it's time toleave your financial advisor?
(01:23):
Some of you listening may sayJames, I just know it's time.
This is a feeling I've beenhaving for some time now and I
just need to make the move intoit.
Other of us of you might bethinking you know, I don't
really know.
I feel like there's someservices, maybe they're a nice
guy or nice gal, but I justdon't feel like something's
completely there or something'smissing.
Well, to me, there's sometelltale signs that it is time
(01:45):
to move on from your financialadvisor.
I actually recorded a video ofthis on YouTube.
The video is called when Shouldyou Work With a Financial
Advisor, but a large part ofthat video is actually when
Should you Change or even Fireyour financial advisor.
I'm going to include a link tothat on the show notes.
So if you're listening to thison Apple or Spotify or whatever
it is, check out the show notes.
There's going to be a link tothat YouTube video where I
(02:06):
flushed that out much moredetail.
Here's just a summary, though, afew basic things.
If any time you ask yourfinancial advisor tax question,
they say ask your CPA, it mightbe time to move on from your
financial advisor.
If your financial advisor isnot providing tax advice and
you're preparing or already inretirement, you're missing a
huge component of what a goodfinancial plan should do.
Another reason is if you don'thear from them ever there's no
(02:29):
proactive reachouts to schedulemeetings, there's no informative
emails to keep you up to dateon various things, there's no
resources like podcasts orvideos that they're making.
If you're not getting some typeof consistent feedback or
communication from them, itmight be time to move on.
One key role of a financialadvisor is to keep you informed
and to keep you updated andeducated to ensure that you're
(02:49):
constantly making the bestfinancial decisions for you.
Another reason is if you have awhole bunch of planning points,
maybe do meet with yourfinancial advisor.
They say this is what we needto do.
We need to do X, y and Z, andthen X, y and Z have a tendency
to start falling through thecracks.
You need to have someone that'sproactive in doing things, so
if something says it's going toget done, you have full
(03:10):
confidence that that's actuallybeing implemented on your behalf
.
So I go through things likethat and more in the video.
So again, check that out in theshow notes, where I walk
through that in more detail andgive you other examples.
But the first thing that youneed to do is decide is it time
to move on from my financialadvisor?
And here's the thing that Iencourage people to do.
And actually, before I jumpinto that high level, some
(03:32):
people might see this podcastand say, well, that's kind of a
silly episode.
How to break up with yourfinancial advisor.
You just do it.
Well, it may seem that way, itmay seem fully rational, but I
can't tell you how many peopleI've spoken with, who.
They talked to us.
They knew that what we offeredwas superior to what they're
currently getting.
They knew the service was goingto be better.
They knew the planningopportunities were going to be
(03:52):
broader, but they couldn't bringthemselves to leave their
existing advisor and that's achallenge.
For a lot of people, it's likebreaking up with someone.
Oftentimes, this is someone youeither know personally or have
gotten to know over years ofworking with them.
It's not easy simply to leavethem.
So here's what I encouragepeople to do in many different
areas of their life, not justwhen it comes to their
(04:12):
conversations or discussionswith their financial advisor is
try to make decisions as yourfuture self, as opposed to your
current self.
There's an author named BenjaminHardy who I really like, and
he's an author that talks a lotabout this of how can we make
decisions to the framework ofyour future self, because
there's always this tensionbetween who you are today and
(04:33):
who you're going to be in thefuture, and oftentimes things
that we know are going to begood for us in the long term
that could be working out, thatcould be saving for retirement,
that could be breaking up withyour financial advisor we don't
do them, and it's because, froma psychological perspective, we
view our future selves as acompletely different person than
our current selves, and so whenwe're thinking of these things,
(04:54):
we think, okay, well, that'sgood for future me, but future
me is almost an entirelydifferent person.
And because that disconnectbecause we don't fully connect
with who our future self is.
We make decisions in which weprioritize our current comfort.
We make decisions thatprioritize not rocking the boat
or doing anything scary today,even if we know it's better for
(05:15):
our future selves.
So if we don't check this, thenthis keeps us in our comfort
zone.
It keeps us doing things thatbring us comfort and avoiding
the things that bring usdiscomfort.
Now, firing your financialadvisor isn't going to be a
source of a lot of psychologicalpapers, but the principle
applies.
Like I said, I've spoken withso many people who couldn't move
forward with an approach theyknew was better for them because
(05:36):
it was too difficult for theircurrent selves to do so, because
it required discomfort, eventhough they knew their future
self would benefit greatly bysome of the things that we're
talking about doing.
Hey everyone, it's me again forthe disclaimer.
Please be smart about this.
Before doing anything, pleasebe sure to consult with your tax
planner or financial planner.
(05:56):
Nothing in this podcast shouldbe construed as investment, tax,
legal or other financial advice.
It is for informationalpurposes only.
Another quote that I like aboutthis is Naval Ravikant.
He has a quote that says andhe's talking about decisions in
general.
But he says, quote if you're50-50 about a decision, then
you're overweighing the comfortof staying where you are, end
(06:17):
quote.
In other words, if you thinkyou're 50-50, you're really not
50-50.
You're lying to yourself andyour brain is tricking you into
saying you know what, this isjust as good.
This current solution is justas good as the alternative.
It's kind of 50-50.
No, your brain is lying.
It might be more like a 40-60or 30-70, but your brain is
tricking you and prioritizingcurrent comfort as opposed to
(06:40):
doing what's best for yourfuture self.
So if we can recognize thatabout our decisions and we can
prioritize the thing that'sgoing to be better for future us
as opposed to current us, we'regoing to make better decisions
as a whole.
So not to get too psychologicalabout what seems like a very
simple topic, but these sameprinciples apply with this type
of decision, which is difficultfor many people.
(07:00):
So once you know that you'regoing to fire your financial
advisor, how do you actually goabout telling them?
Well, in this case I would sayit depends a lot on the
relationship, because in mostcases you don't actually have to
tell them.
Your advisor, in most cases,doesn't control your account and
you can move it at any time.
So, for example, if you have afinancial advisor and they use
Charles Schwab as a custodianand you say, you know what, I
(07:22):
really just don't need afinancial advisor anymore, well,
you could simply remove yourfinancial advisor from the
account and it becomes yours.
Or maybe you want to transferto a different financial advisor
who uses fidelity as acustodian?
Well, your current financialadvisor at Fidelity, they could
sign the paperwork.
Or have you sign the paperwork,I should say, to initiate the
transfer.
That just gets sent to Schwab'sback office.
(07:43):
Then all your assets move inkind to Fidelity, assuming
they're non-proprietary assets.
So there's really not a need to.
From a logistical standpoint,it's more of a respect thing or
a hey, thank you for your helpover the years, type of a thing
that you do to be polite andnotify, but it's not a
requirement.
So, that being said, there'snot a rule book for how you have
(08:04):
to notify your advisor.
It more comes down to what yourrelationship with them is like
and I would say, in general,there's three options.
Number one if you're firingyour advisor and saying work
with another advisor or justdoing things on your own, first
option is don't tell them andjust do the transfer.
So this is really, if you haveno relationship with your
advisor, or if you know they'relikely to be unpleasant if you
do tell them, or there's justsomething that you don't want to
(08:26):
communicate with them about,maybe something bad happened
Well, you don't have to tellthem.
You can simply transfer.
So option number one is justmove away, set up new account
somewhere else and transfer yourassets and kind over.
Or in the case, like Imentioned before, maybe your
accounts are already at Schwabor Fidelity or a custodian like
that, you can simply requestthat your advisor be removed
(08:47):
from the account.
Your advisor never owns theaccount.
You always own the account, andwhen you're working with an
advisor, they have somethingcalled limited power of attorney
to make trades and manage theaccount on your behalf, but
you're the owner.
So anytime you could go to thatinstitution and simply have
your advisor removed and thenthe account simply becomes yours
.
So that's option number onedon't tell them and just
(09:08):
transfer.
Number two is you could sendthem an email.
Now I'm actually going toprovide some scripts in just a
second.
I'll read them off to you, butI'm also going to include a link
to these just a Google drivefolder that's in the show notes
that you can access.
You can send them an email justto notify them.
Hey, thank you for everything.
I found a new advisor I'm goingto transfer.
And then the third option andthis is if you tend to have a
(09:29):
much closer relationship withthem or just feel be the most
respectful thing to do, is youcould give them a call, call
them, say thank you foreverything, but we're moving in
a different direction.
You can even use the emailscripts that I'm providing in
the link below as a general kindof talking points and customize
them to your specific situation.
But a phone call just to notifythem and say thank you and I'm
moving on.
So I'm going to read to youthese scripts.
(09:51):
These are available, so go tothe show notes and you can just
download these and use them andcustomize them as needed.
But here's the scripts that Ihave that I send prospects
occasionally when they'redeciding to work with us but
don't know exactly how to breakup with their existing advisor.
So there's two scripts here,and that's not to say there's
only two reasons to break upwith your current financial
advisor, but the first of thesescripts is based upon a prospect
(10:14):
, maybe wanting to go to afinancial advisor that's
offering more services.
So the script is this dearfinancial advisor's name, I hope
you are well.
I'm writing to you today to letyou know that I've decided to
work with a new financialadvisor.
I want to start by thanking youfor all of your help over the
years.
You've been a valuable asset tous and will be forever grateful
for your guidance and expertise.
(10:34):
As you know, we're approachingretirement.
This is a big change for us andwe're looking for a financial
advisor who can provide morecomprehensive services that meet
our unique needs as we shiftfrom our accumulation phase into
retirement.
We're specifically looking foran advisor who can help with the
following Number one taxstrategies.
I want to make sure we'reminimizing our lifetime tax
payments through a coordinatedtax strategy.
(10:55):
Number two efficient spendingstrategies.
We want to make sure that we'redrawing down our portfolio in a
way that maximizes ourretirement income.
Number three an overallfinancial review to ensure that
we feel a hundred percentconfident in our retirement
decisions.
We've done a lot of researchand we've engaged a new
financial advisor who we foundto be a good fit for us.
They'll be initiating transfersfrom insert your financial
(11:16):
institution name to completethis process.
Again, thank you for all ofyour help over the years.
We wish you all the best in thefuture.
End of the script.
Now, what you want to do, youdon't have to use these words
exactly, but the generalapproach is thank you, advisor,
for your help and your servicesover the years.
Make it very clear.
We've made our decision andwe're going to go in a different
(11:37):
direction.
Here's the reasons we're doingso.
Again, thank you for yourservices.
What you want to avoid doing isleave it open or leave it
ambiguous or a little bit vagueof are you transferring?
Are you not transferring?
Are you trying to ask if we cantalk about it?
Make it very clear, but do soin a respectful manner.
So that's the first script.
The second script is morefocused on wanting a team that's
(12:00):
going to maybe provide morelongevity for you.
So a lot of people they come tous and say, hey, we actually
don't mind our advisor.
We think that James, you andRoot will provide better
services, but our currentadvisor is fine.
It's just.
The bigger reason is ourcurrent advisor might not be
retiring that much later than weretire, so we don't want to
have to make this decision tofind a new advisor in five years
or 10 years.
(12:20):
We want to know that we'reworking with a team that's going
to be with us through theduration of our retirement, and
we want to do it now, when wecan make the decision that's
best for us, when we have ourhealth and our mental faculties
in the capacity to make theright decision.
So here's that script.
Dear financial advisor, I'mwriting to you today to let you
know we've decided to changefinancial advisors.
(12:41):
I know this may come as asurprise, but we've given it a
lot of thought and we believeit's the best decision for us at
this time.
We want to start by thankingyou for all of your help over
the years.
You've been a valuable asset tous and we have nothing but
gratitude for your guidance andexpertise.
As you know, we are retiringsoon.
We've decided that we want towork with a financial advisor
who is younger than us, but wedon't have to make the decision
(13:02):
to change advisors later in life, when you may ultimately decide
to retire.
We've done a lot of researchand we've engaged a new
financial advisor who we foundto be a good fit for us.
They're in contact with Insertfinancial institution name to
make the necessary changes onour accounts.
Again, thank you for all yourhelp over the years.
We wish you all the best in thefuture.
So, as you can see again, thisis very clear, not ambiguous.
(13:25):
We've clearly made our decision.
But we want to thank you forthe time that you've put into
our relationship over the years.
And this is for people whorealize they're smart about this
that your financial advisor isnot going to work forever.
Now, when you're looking atthis, let's say your advisor is
60 and you're 65, maybe they dowork another seven, eight years,
but at that point they'reeither going to sell the
(13:45):
business to another advisor whoyou may or may not have a
relationship with they may sellto a private equity firm, so you
almost certainly wouldn't havea relationship with whatever
advisor you get assigned with atthat point or they may simply
just disband the business andthat's pretty rare, but some
advisors simply coast until theykind of gradually lose clients
and then they finally just saythe business is shutting down.
So as you look at those options, unless there's a really strong
(14:09):
, clear internal succession planin place, you may not have much
say over who your next advisoris in seven, eight, nine years
once your current advisorretires.
So a lot of people want to getahead of that.
They either want to know fromtheir advisor who exactly am I
going to be working with whenyou retire, or they want to make
the decision now to say who'sthe right team for us, not just
(14:31):
for the next five years or even10 years, but next 20, 30 plus
years.
So those scripts are in theshow notes and those are
templates that you can use asyou're having the conversation.
So, to summarize, step numberone is how do you know when it's
time to leave your advisor?
Step number two is how do youactually have that conversation
or actually implement that leavefrom your advisor?
Step number three is what doyou actually do logistically?
(14:53):
Well, number one notify them.
You're terminating therelationship, first and foremost
.
But number two, the secondthing in your new advisor should
be able to help you with this,because sometimes it's awkward
to do it with the advisor thatyou just fired.
But your new advisor can helpyou understand.
Are there any proprietary fundsthat you might hold with your
current advisor that would haveany trouble transferring to a
new institution?
(15:13):
Your new advisor should be ableto tell you that In many cases
the answer is no.
Everything just comes over veryeasily.
But in some cases they mightsay, hey, you need to sell that
fund or this fund can't transfer, this needs to be liquidated
first.
But they can walk you throughthat process.
The step three, the third partof this, is are there any life
insurance contracts or annuitiesor non managed accounts that
(15:34):
you also need to make suretransfer?
Let's keep this really simpleand assume you have one IRA that
you had an advisor managing andyou're going to transfer to a
new financial advisor.
So you open up a new IRA atyour new financial advisors
institution, you transfer overyour old IRA, anything you're
good until you realize, oh, mygoodness, the old advisor also
(15:55):
sold me a life insurance policyat some point and oh, you know
what I forgot.
But the old advisor, there's anannuity contract I have through
them or there's some other typeof product that I have through
them.
So just doing a full checklistto see are there other products
that that advisor is listed asthe advisor on, and do those
also need to transfer?
Not necessarily change them,but simply have a new advisor of
(16:18):
record or new institution ofrecord on them to ensure they
can still be tracked for you.
And then the fourth thing thatyou would do is this more of a
privacy thing is many advisorshave portals, myself included.
So when clients are workingwith us, they have a portal they
can log into.
They can see all their accounts, the institutions that we're
managing.
They can also connect outsideaccounts.
So maybe they have a 401kthrough work or maybe they have
(16:42):
kind of like a play money fundon the side, or maybe they have
whatever the case might be, amortgage linked in, bank
accounts linked in.
Well, you probably don't wantyour old advisor that you fired
to still have access to allthose different things.
So go into your portal ifyou're going to be transferring
away from the advisor, unlink ordelete all of your connections
and then request that theadvisor deletes your portal as
(17:04):
well.
So making sure all history istaken care of, everything's
deleted, so you don't have anylive links that are continuing
to go into your old advisor'sprogram even though you're no
longer with them.
So those are the basic steps.
As easy as it might sound,sometimes there's some
difficulties emotionally leavingyour advisor and there are also
some logistical things that youneed to make sure you're taken
(17:25):
care of.
But if you can follow the stepsthat we laid out today, you
should be in a good position.
But many times, the hardestpart about moving in the right
direction you know is right foryou is just making that
difficult decision to part wayswith someone who is with you
along the way.
But what I encourage everyoneto do is look at your finances.
This isn't just an IRA, thisisn't just a brokerage account.
This isn't just a Roth.
(17:45):
This is really your financialfuture and your financial
security.
What decision would future youmake when it comes to doing
what's best for you?
So that is it for today'sepisode.
Hope you like that.
Hope that was helpful.
If you're enjoying this podcast,I always appreciate it when you
leave reviews.
It does help more people to findthis podcast so more people can
get valuable information asthey're preparing for their
(18:07):
retirement, and also check usout on YouTube.
The channel name is JamesCannell Cannell C-O-N-O-L-E.
Search for that on YouTubewhere you'll find this episode
as well as many other videosthat help you to create a more
secure retirement so you canultimately get the most out of
life with your money.
That's it for today.
Thank you for listening andI'll see you all next time.
(18:27):
Thank you for listening toanother episode of the Ready for
Retirement podcast.
If you want to see how RootFinancial can help you implement
the techniques I discussed inthis podcast, then go to
rootfinancialpartnerscom andclick Start here, where you can
schedule a call to one of ouradvisors.
We work with clients all overthe country and we love the
opportunity to speak with youabout your goals and how we
might be able to help.
And please remember nothing wediscuss in this podcast is
(18:50):
intended to serve as advice.
You should always consult afinancial, legal or tax
professional who's familiar withyour unique circumstances
before making any financialdecisions.
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