When your financial advisor changes companies, it can be a time of uncertainty, leaving you with questions about the future of your investments and financial plans. This situation is not uncommon, as advisors may change companies for a variety of reasons, including better opportunities, changes in company culture, or personal growth. As a client, it is important to understand that your advisor transition could affect your financial strategy and what actions you should consider taking. You may be wondering whether to follow your advisor to their new firm or explore other options.

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Understand why financial advisors change companies

Financial advisors often change companies for a variety of reasons. More specifically, their reasons may include:

• Pay better: Sometimes advisors may seek out better compensation packages, including competitive salaries, bonuses, or commission structures that can improve income and job satisfaction.

• Career growth: The desire for better career advancement opportunities, such as strong training programs, mentoring, or a clearer path to advancement, may also motivate an advisor to change companies.

• Company culture: Alignment with company culture and values ​​can also influence an advisor’s decision. They may prefer a company that reflects their personal philosophy.

• Improved resources: Access to better resources and technology can also motivate an advisor’s move, as firms with cutting-edge tools and platforms allow advisors to serve their clients more effectively.

• Structural changes: Changes in company structure or leadership, such as mergers, acquisitions or management changes, may cause advisors to look elsewhere for stability or a more supportive working environment.

Consider following your financial advisor into their new business

When an advisor changes companies, you need to understand the impact of their move on your accounts if you decide to follow them to their next company.

Depending on the type of investments or accounts held, clients may need to transfer their assets to a new custodian if they wish to continue working with the advisor. Certain products, such as exclusive products mutual funds Or private equity dealsmight only be available at certain companies, so moving might mean abandoning them.

Additionally, customers should check whether there are any account closure fees, transfer restrictions, or specific requirements related to tax-advantaged accounts, such as IRAs, that could come into play if they choose to exit their business current to follow their advisor.

Changing practices may also involve some administrative procedures. When transitioning accounts, customers may need to complete transfer authorization formswhich allow assets to be moved to a new custodian. The time frame for this process varies depending on the assets held and the companies involved, but it generally ranges from a few days to a few weeks.

Advantages and disadvantages of following your advisor

When your financial advisor changes firms, choosing to follow them can offer obvious benefits, including:

• Consistency in financial strategy: Moving with your financial advisor allows continuity in your financial plan. This can help you avoid disruptions in your investment approach because the advisor already knows your goals and financial context.

• Trust and familiarity: Established trust with a counselor can be beneficial because the relationship is built on past experiences and shared understanding, which can potentially ease transitions and minimize adjustments.

• Simplified communication: Changing companies with your advisor can streamline communication. Since the advisor already understands your preferences, there may be less initial discussion and clarification, making the transition smoother.

However, there are potential downsides that you will also want to consider when considering following your advisor to a new company, such as:

• New pricing structures: Different companies may have varied fee termswhich could result in increased costs or changes to the terms of service. It is advisable to understand these changes in advance to avoid unexpected expenses.

• Potential for limited investment options: A new company may offer different investment offerings, which could impact the range of products available, especially if the company specializes in a particular asset class or investment style.

• Possible adaptations to the service: Firm policies and procedures may affect the level of service or access to previously available tools, which could change your experience and comfort with the new advisor platform.

Consider Alternative Advisors at Your Current Company

If following a new firm’s advisor doesn’t seem appealing, clients may consider staying with the current firm and working with another advisor. Many firms keep detailed records of client needs and preferences, which can allow for a smooth transition to a new advisor.

Additionally, large financial companies often have in-house specialists in various areas, such as retirement planningin tax strategy or estate management, which can allow clients to access broader expertise. Meeting with potential advisors from the current firm can help you learn whether a new advisor could meet your specific financial goals.

Ask questions before your advisor leaves

If your advisor is changing firms, asking the right questions can clarify how the move will impact your business. financial plan. Start by asking them why they decided to change companies and how it aligns with their professional goals. Ask about any changes to the services or products they may offer in the new business, especially if you are counting on specific investments or exclusive products.

It’s also helpful to ask about any new fees, transfer costs, or account minimums that might accompany the move. It is essential to understand if your accounts will need to be transferred and if there are any tax implications. Additionally, confirm whether your advisor’s approach or investment philosophy will evolve with this transition and how the new company’s resources might impact its ability to manage your portfolio.

Finally, ask about the support you will receive during the transition and the timeline for moving your accounts if you decide to follow them. Clear answers to these questions can help you make an informed decision about whether you should stay with your advisor or explore other options.

Conclusion

When your financial advisor changes firms, it gives you an opportunity to evaluate the direction of your financial plans and your relationship with your advisor. By understanding their reasons for moving, assessing the impact of the transition on your accounts, and considering other options, you can make an informed choice about whether to follow your advisor or stay at your current company. Taking the time to review your goals and ask thoughtful questions can help you maintain a trajectory that aligns with your financial goals, regardless of changes in your advisory relationship.

Financial Planning Tips

• A financial advisor can help you create a plan to set and achieve different financial goals. Finding a financial advisor doesn’t have to be difficult. The free SmartAsset tool connects you with up to three licensed financial advisors who serve your area, and you can have a free introductory call with your advisor to decide which one seems best for you. If you are ready to find an advisor who can help you achieve your financial goals, start now.

• When developing a financial plan, you need to consider the cost of living, especially if you want to move someday. Smart assets cost of living calculator can help you see how prices of essential goods vary by location.

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