What to Consider When Switching to a New Financial Planner

Choosing a financial planner is one of the most important financial decisions you will make. In many ways, finding the right financial planner is like finding a spouse or life partner. You want someone you can trust, who can communicate effectively, and who understands and can support your achievement of short- and long-term goals.

Unfortunately, some planner-client relationships just don’t work out. You might find, through the process of working together, that your financial planner’s vision and values don’t align with yours. Maybe they’re not responsive, or they never reach out to you proactively, such as in times of market turmoil. Maybe you’re not confident that their recommendations are truly in your best interest or tailored to your unique needs. Or maybe you’re dissatisfied with your portfolio’s performance.

If you’re not happy with your financial planner — whatever the reason — then it’s time to make a change. (And if you believe your advisor engaged in illegal or unethical behavior, don’t hesitate to file a complaint with the appropriate authorities.) But don’t rush into a new relationship with the first financial planner you find. Take the time to prepare yourself and your finances for the switch, so you can find a competent, ethical advisor who will put you at ease.

Check Your Financial Planning Agreement

Before you make a change, it’s a good idea to review the financial planning agreement or contract that you signed with your current planner (and if they never asked you to sign such a document, that’s another sign that a change is needed). Some may involve account closure or agreement termination fees as well as asset transfer limitations and liquidation requirements. You can wait to complete this review until you’ve found a new financial planner to work with, so they can help you determine the total potential costs and tax implications; just make sure you don’t skip this important step.

Define Your Search Parameters

There are more than 260,000 personal financial advisors in the United States, and more than 95,000 CFP® professionals. That’s a lot of fish in the proverbial sea.

To find the right partner, you first need to determine what you’re looking for. Start by asking yourself a few key questions:

• Do you want someone who can help you create and maintain a holistic financial plan, or do you just need help with a specific financial issue, such as growing education savings?
• Do you want a financial planner who specializes in a particular area of finance, such as debt management or insurance planning? Or someone who has expertise handling certain circumstances, such as those faced by military or LGBTQ+ families?
• What didn’t you like about your previous financial planner and want to avoid in your new financial planning relationship? Was there anything that worked well that you’d like to maintain or replicate?

Answering these questions will help you narrow your search to find the best candidates for you.

You will also want to look for an advisor who has earned CFP® certification, which means they have completed comprehensive coursework, fulfilled on-the-ground experience requirements and passed a rigorous exam, among other things. They are trained to provide detailed, holistic financial planning or can offer advice on specific needs. Perhaps most importantly, CFP® professionals commit to high professional and ethical standards, which include an obligation to act as a fiduciary — that is, to always put your best interests first.

Interview Candidates

Once you find a few potential planners, it’s critical that you interview them before making any hiring decisions. Be sure to ask them these 10 questions about their qualifications, services and how you will work together. You should also ask them about the scope of your financial planning engagement and how your relationship will be measured. Taking the time to ask these questions should help you avoid the pitfalls of your previous advisory experience. It will also help to set expectations and build a strong foundation for a productive relationship with your new planner.

Prepare for the Switch

Once you’ve found a new financial planner, it’s time to let your old advisor know. Ending a relationship can be uncomfortable, but at least with a financial planner, it can usually be done via email. It’s up to you how much you want to share or explain with your old advisor — just be sure you remain civil, as you may need their help to facilitate account transfers or obtain required tax forms. You should also compile as many of your account statements and other important documents as possible, both for recordkeeping purposes and to share with your new planner. You may want to pull these documents together before alerting your old advisor that you’re making a change, in case they don’t respond to the news in a professional manner.

A good financial planning relationship is based on trust and should give you confidence and security today and in the future. If your current planner isn’t providing that level of confidence, it’s time to make a change. It will take some time and effort, but finding the right financial planner partner for you will be well worth the investment.