What to Do When Your Financial Adviser Retires

Ask about a succession plan

If your financial adviser gives you a heads-up about his or her pending retirement, ask if his firm has a succession plan. And, if they do, find out the specifics of their changing-of-the-guard game plan and which adviser they’re eyeing to take over your account. Then meet with the new adviser to see if it’s a good match.

If you’re not comfortable with the adviser you’ll be working with after your current one retires, then request to interview others at the firm, says Robert Gilliland, managing director and senior wealth adviser at Concenture Wealth Management in Houston.

In Copeland’s case, for example, she will one day hand the reins to her daughter, Nicole Horton, who is a certified financial planner with more than 10 years’ experience in the mother-daughter firm. “It is a family affair,” says Copeland. “She grew up in the business. A lot of the clients know her, and she knows them. It’s comforting for clients to know that she is in the wings, that she is part of the process.”

Should you stay (at your current firm) or should you go?

To quote the Clash, “Should I Stay or Should I Go?” is the question you have to answer. This decision is completely up to you, Gilliland says. The easiest decision, he says, is to stay, as you won’t have to endure the search for a new adviser and move all your accounts to a new firm. But do so only if “both spouses are comfortable with who they will be working with going forward and the adviser understands their goals and risk parameters,” Gilliland says. “When you decide to stay, it is usually because you are comfortable with the team and trust they are operating in your best interest.”

If you’re trying to decide whether to stay with your current financial advisory firm, there are three things to ask yourself, says Nick Foulks, director of communications strategy and client engagement with Great Waters Financial.

• Did I have clear expectations upfront on how they would serve me?
• Have those expectations been met?
• What is the true reason I am leaving?

Foulks notes that most wealth management firms have an investment style or philosophy that they stick to when it comes to managing money: “So, the question becomes: is it style or the person?” If you like the money-management style of the firm, then stay with it and connect with a new adviser there that you click with, he says. On the other hand, “if you don’t agree with the company’s investment philosophy, then staying and finding a new adviser within the firm won’t create change.”

If you’re not 100 percent happy with the service you’ve been getting, now’s the time to talk it over with your existing firm. If issues, such as fees, aren’t addressed to your satisfaction then it’s time to explore other options.

One pro of making a switch is you get a fresh perspective on managing your wealth from a new team at a new firm, Gilliland says. You might also hit it off better with your new financial adviser and team.

Home in on experience and expertise

Most financial advisers on the cusp of retirement likely have decades of experience and have been through many market cycles. They’ve seen their fair share of bull markets and bear markets. But just because an up-and-coming financial adviser may not have as many years in the trenches as your retiring adviser doesn’t mean he or she can’t do an excellent job and help you meet your goals.

“Youth or inexperience is not necessarily a bad thing as long as you’re comfortable with the new adviser and confident they have a very strong support and structure in place,” Gilliland says.

Adds Foulks: “Age is not necessarily a dictator of understanding or wisdom in finance.”

The first step a new adviser should take is to develop and review a new financial plan with you. During this talk, both sides should get a good understanding of each other’s expectations. For example, if you’re a conservative income investor but your new adviser is pushing a portfolio with a big helping of cryptocurrencies or other types of risky assets, the fit likely isn’t a good one.

And remember, it’s your money, so there are no dumb questions to ask.

“Ask questions about their investment philosophy, how they get paid, if they are a fiduciary, the services they offer, and their commitment to servicing your needs,” says Gilliland. Fiduciaries are required to put your financial interests above their own.

The most important thing is to make sure your interests are aligned, he adds. And that means knowing what services you’re getting for your money. “It is vital to understand what you pay and how the adviser gets compensated,” Gilliland says. You don’t want to find yourself in a situation, for example, where your adviser is making a lot of trades because he earns a commission on the transactions. That’s why many financial advisory firms are moving to the fee-only structure, in which they charge a set fee for the dollar amount of your assets that they manage.