How to Leave Your Financial Advisor in 5 Simple Steps

April 5, 2017

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If you're feeling like your financial advisor doesn't have your best interest at heart lately, it's time to move on. When they're more focused on selling you products than ensuring your portfolio is earning at its optimum level, it's safe to say that you have a salesman and not an advisor.

I went through a similar situation in 2011. My wife and I had recently gotten married and we were ready to focus more intently on investing for our retirement.

We met with a broker who spent a lot of time with us upfront. He discussed our situation and how he could help us save for retirement and plan for our daughter's college needs.

As our relationship continued, the meetings became less frequent. When we did ask for advice, he would steer us toward products his company had strategic relationships with as opposed to mutual funds that would give us the best return.

How to Lose $5,000 Fast

In one specific instance, we had saved up around $100,000 to put a big down payment on our next home. We asked for his advice on a safe place to put our money while we were waiting to buy our home in the next couple of years. Our advisor suggested placing the money in a Pimco Bond Fund as it would be much less volatile than the stock market.

A few months later after taking his advice, our $100,000 was down to $95,000. Yes, I should have educated myself about front load fees and risks of bond funds before investing such a large chunk of our savings, but that was what we were paying this guy for!

After that tough money loss and after educating ourselves further, we decided it was time to leave our investment “advisor”. We didn't feel like we had a partner in our retirement success anymore. He was definitely not performing his fiduciary duty.

We transferred all of our money and invested in low-cost index funds with Fidelity at a fraction of the fees we were paying our advisor's firm.

Let's say you're in a similar situation and you're ready to make a change…

How to Leave your Financial Advisor in 5 Simple Steps

1. Find Your Next Investing Partner

Before you say goodbye to your current advisor or move any assets, research how and where you'll be investing your money when you leave. You may fall into one of these three categories:

I'm Clueless

If you have no clue what to do with regard to investing, I'd recommend speaking with a Fee-Only Certified Financial Planner. You will pay these folks a flat hourly fee for their advice.

They can help you set up a portfolio that works for your situation without taking a percentage of your assets year over year. Facet Wealth and XY Planning Network are good resources to find Fee-Only Certified Financial Planners that best fit your situation.

I'd Like an Easy “Do it Yourself Option”

If you have increased your investing savvy lately, but don't know exactly what to invest in, I'd highly recommend investing your retirement in a Target Date Fund with Vanguard. The fees are low, you're investing in market indices that get you a solid return over the long haul and rebalancing is taken care of for you. It is an excellent “set it and forget it” option for investors.

I'm an Investing Guru

If you want more control and have grown your investing brain power lately, go with a low-cost partner like Fidelity or Vanguard and create your own portfolio.

Wherever you choose to go, I'd highly recommend avoiding commission-based financial advisors. Based on their business model, they can be more interested in selling you into specific products than advising you toward a successful retirement.

2. Understand the Fees

Once you've chosen your new partner, speak with them about the fees associated with the transfer of assets. Here are some good questions to ask:

  • If I transfer my assets over to you, will there be any fees when I open my account?
  • Should I plan to liquidate my assets prior to transferring to avoid fees (ex. some firms, like Vanguard, charge a fee to liquidate funds)?
  • What other fees should I be aware of?

Also, research the fees that are associated with closing out your current investment account. For example, we recently closed out an account with Fidelity to move over to Vanguard and Fidelity charged us $50.

3. Have Your New Firm Help with the Transfer

Given that your new investment partner is getting your business, they are very keen on making your transition process as smooth as possible. Take advantage of their uber-kindness and ask them what is the easiest process to transfer your assets over. Usually, they will have an online transfer system through their website (Fidelity) or they will require you to fill out paperwork and mail it in to complete the transfer (Vanguard).  Depending on who you choose, the full transfer process can take anywhere from 5-10 business days.

4. For 401k / IRA, Do NOT Send Yourself the Money

If you have a 401k, Traditional IRA, Roth IRA or any other tax-favored accounts, do not send yourself the money as you're making the transfer over to your new investing partner. You could be slapped with a 10% early withdrawal penalty and have to pay a boatload of taxes on your assets depending on your type of account. Instead, transfer the assets directly from one firm to the other.

5. Remove Emotion from the Equation

If you're dreading the phone call to your current broker, I completely understand. Who knows? Your investment advisor may be your brother-in-law. Yikes! I pray for you.

Try your best to remove emotion from the equation. You may hurt some feelings but this is your retirement we're talking about here!

Do as much of the leg work in transferring the assets over with your new investing partner. Once the money has been transferred out, if you feel compelled you can call your old partner and let them know the account can be closed.

If you call them beforehand, they will try to get you to stay and tell you all sorts of reasons you are making a mistake. Avoid that call if you can.

If it really is a family member or a close friend that is currently managing your money, then I'd discuss the reasons you're leaving in person. Show them the money you'd be saving and why you're not pleased with the overall partnership. If it were me, I'd want to know so I could improve and adjust my approach toward advising.

Who knows? Your frank advice may drastically improve their business.

Are you considering leaving your financial advisor?

Please let me know in the comments below!

Andy Hill

Andy Hill, AFC® is the award-winning family finance coach behind Marriage Kids and Money - a platform dedicated to helping families build wealth and happiness. With millions of podcast downloads and video views, Andy’s message of family financial empowerment has resonated with listeners, readers and viewers across the world. When he's not "talking money", Andy enjoys being a Soccer Dad, singing karaoke with his wife and relaxing on his hammock.


  • I am glad that you mentioned how people who have no clue about the industry should look for financial planners that can help them out get started. My son just got promoted at the ad agency that he works for, and he is now looking to put some of his savings to work. While he can write a sales proposal like no other, he doesn’t really have the expertise for inventing his money yet, so a reputable financial advisor can definitely work wonders for him.

    • Absolutely! Not everyone wants to (or needs to) dive deep into their money. Hire a professional when you need one. I’m horrible at fixing things around my house … that’s why I love getting professional help!

  • Great advice! Those investment brokers are still in business because people still ask for their help…but the more people learn about basic investing themselves, the more likely they are to do it independently and aren’t getting enough benefit (or any). We all learn these things the hard way l, I think. But…I see the role of these investment brokers changing a lot in the future with new fiduciary rules and people having so much more access to the information they need to do it themselves. Like this post! ;)

    • I completely agree. Blockbuster did not evolve and look what happened. Netflix emerged as a paradigm shifting company that rocked everyone’s world. I hope the investment advisor world continues to evolve so the regular investor can win.


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