What to do when your financial planner leaves

Your relationship with your financial adviser should ideally be a lifelong one. You appoint an adviser when you start your working career and if that is the correct adviser and fit for you, then the relationship will last a lifetime. But what happens when your financial adviser switches from one company to another?

First, you should have the type of client/planner relationship where your planner will get in touch with you to inform you of the change. He or she may tell you which company they are going to, and offer you the choice of moving over as a client of theirs. This will work particularly since the relationship between a financial planner and their clients is strongly based on trust and you may not feel inclined to start building a new relationship of trust with an adviser appointed by the company.

However, your adviser may have signed a restraint of trade when they left – this might preclude them from contacting any of their current clients to inform them of the fact that they are leaving or even which company they are going to. In such a scenario, the client can directly approach the adviser and request to move their portfolio to the company that the adviser is moving to.

If you are working with an independent financial planner, who is moving from one independent firm to another, there should be no reason why you cannot switch. However, if a financial planner is moving from an internal position at one product provider to another, then you want to be wary of the planner trying to switch you from one product to another purely for brand loyalty purposes and to earn fees.

Questions you should ask:

There are some basic questions you should ask your adviser before you decide whether or not to move your portfolio with them to their new company:

  • Will their business model be changing? What was the fee structure at the old company and will it change at the new company?
  • Will you be charged a fee for moving your portfolio across without actually making any product changes?
  • Research the company that your adviser will be joining and find out if it will be a good fit for you.
  • Does the new company offer the same services as the old company? Will you have a greater range of products to choose from? Will the adviser have increased resources?

At the end of the day, this is an ideal time to review your adviser’s performance and decide whether or not he or she has provided good enough service that you are willing to move over with them; or if now is the time to start looking for a new adviser.

  • This article was first published in City Press on 16 October 2016.

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