Let’s face it, relationships can be hard. Whether it’s with your plumber, your significant other, or your financial advisor, there are many legitimate reasons you may want or need to leave them … and just as many reasons it’s tough to do.
So, what do you do once you’ve decided it’s time to “break up” with your current advisor? Try keeping the conversation professionally cordial, focusing more on the practical “how” than the gory details of “why.” Avoid getting mired in the emotions. From there, like many things in finance, it depends on you and your facts. Here are some common reasons people decide to break up with their advisors:
Focus on the relationship you have outside of your business relationship, emphasizing its value to you.
Clearly communicate the practical reasons a change is in order. Be candid and straightforward; remove emotions from the mix.
End with an “ask” to respect your decision. Let them know you’d like to prioritize your personal rather than professional relationship with them moving forward.
“First and foremost, thank you for all you have done for our family over the years. You’ve not only shown us care as our financial advisor, you’ve remained a true friend. That said, we have decided it is in our best interests to take a different approach to our financial life. As we move forward, we hope to remain good friends. Thanks again for your understanding and support.”
Be clear that the trust has been broken.
Communicate the specifics – not in anger, but in the spirit of helping them improve. For example, was it the mistake itself, or the way it was handled?
If you are unclear about ramifications, ask questions to better understand what occurred and how it might impact you long-term. (e.g., are there future tax consequences, etc.)
Press them to make you whole. An advisor’s mistake should not cost you.
If the advisor is uncooperative, consider what next steps you’d like to take to report and/or correct the issue. In case worse comes to worst, maintain a timeline and paper trail of your experience and conversations.
If circumstances warrant it, thank them for the services or individuals you have found helpful and positive. (It will mean the world to valued team members who have worked hard for you.)
“We wish to inform you we have made the difficult decision to end our relationship with your firm as soon as possible. As you may be aware, we have been frustrated by a service lapse under your care. We understand mistakes happen. But from our perspective, your firm’s follow-up was disappointing, and communications lacked the clear transparency we value. As a result, we no longer trust that you will be able to serve our financial best interests moving forward. Due to your mismanagement, we estimate we’ve incurred a cost of $XXX, and expect to be made whole in that amount. Please explain the process you will use to address this concern. We do acknowledge and appreciate that which your team has done for us in the past. Thank you for your continued support and understanding during our transition.”
“First and foremost, thank you for all you have done for our family over the years. We are grateful for your advice, and the many ways you have helped us build toward financial success thus far. That said, we have decided it is in our best interests to take a different approach to our financial life. We hope you understand and respect this decision. We wish you only the best in business and life. Thank you again for your support through the years!”
Here are a few overarching suggestions for every scenario:
Whether in your personal or professional life, good relationships are hard to find. If you are happy with the care and service your advisor is providing, let them know. Everyone loves positive feedback! That said, an ill-fitting advisory relationship can cause lasting damage to your family’s financial well-being. If your financial advisor is no longer serving your best interests, breaking up with them may be the healthiest move you can make.
Disclosure:
This material has been prepared for informational purposes only and should not be used as investment, tax, legal or accounting advice. All investing involves risk. Past performance is no guarantee of future results. Diversification does not ensure a profit or guarantee against a loss. You should consult your own tax, legal and accounting advisors.
This post was written by a member of the Plancorp Women’s Initiative, which strives to advocate for clients and women in the community by addressing topics specific to their financial lives. For more information about the Women’s Initiative and how you can get involved, email sara@plancorp.com or visit the Plancorp Women’s Initiative page.