What to do if my financial advisor retires?
Here’s what happens to your money and what you should do if your financial advisor decides to retire.
Summary
According to Cerulli, by 2032, nearly 37% of financial advisors, who collectively control $10.4 trillion, plan to retire.
If your financial advisor decides to retire, you can keep your assets with the existing firm or find a new one.
Stay on course with a financial plan, no matter who your new financial advisor is.
Unbiased can pair you with a qualified financial advisor to step in should you need it.
What should I do if my financial advisor retires?
According to Cerulli, by 2032, nearly 37% of financial advisors, who collectively control $10.4 trillion, or 40% of total industry assets, plan to retire.
If you haven’t seen this scenario, you will likely soon. Here’s what to do when your financial advisor retires.
Talk to your advisor
Your advisor likely has a plan for succession, including a new advisor tapped to handle your portfolio. Get to know the new advisor, including their qualifications and approach to financial planning.
Talk about the details. If your transition involves moving to another firm, ask about the process and review the new contracts you’ll likely need to sign.
You want to feel confident entrusting your money to a new financial advisor. Your current advisor can help with the process.
Review your financial plan
Gather important documents, such as account statements, taxes, and correspondence with the financial advisor. Review your investments, retirement plan, insurance amounts, tax situation, estate planning, and more. If something needs to be adjusted, now is a great time to do it.
Decide if you want to change firms
A relationship with a financial advisor is a personal one. If you’re not comfortable with the person who was handed your investment portfolio, start to interview potential candidates. Choose one you respect and whose fee structure works for you.
Create a handover plan
If you’re moving to a new firm, you may fill out a Transfer Instruction Form (TIF) to move your brokerage account to a new firm. Fill out the form with the names and numbers of the accounts exactly as they appear on your statements. When the request form arrives to your old advisor, the accounts listed will be sent to the new advisor.
If you’re staying with the firm, you likely don’t need to do anything, but it would be beneficial to review your financial plan with your new financial advisor to ensure that you are on the same page.
What happens to my money if my financial advisor retires?
It’s natural to wonder where your money goes if your financial advisor retires. The short answer: Your money remains in place unless you move it.
Your money is typically held with a third-party custodian, which is usually a large financial institution such as Charles Schwab or Fidelity. Your advisor has likely made changes on your behalf, but the advisor typically doesn’t hold your money.
If your advisor retires, the money stays in the account, and you will still have access to all the money you’ve invested.
Be aware that not all investments are transferable.
Investments that are transferable:
Stocks
Mutual funds
Exchange-traded funds (ETFs)
Money market funds
Brokered CDs
Investments that are not transferable:
Mutual funds
Annuities
CDs bought directly from a bank
Life insurance policies
Commodities
OTC (over-the-counter) stocks
Important note: If you sell investments instead of transferring the accounts, you may owe capital gains taxes. Transferring mutual funds also might incur fees if they haven’t reached their maturity date yet.
How do I find a new financial advisor?
If you’re looking for a new financial advisor, there are a number of places where you can find a good one.
You can find a good financial advisor by searching online or asking for recommendations from people you trust.
Some questions to ask a financial advisor include:
Are you a fiduciary? A fiduciary is required to act in your best interest and can’t accept money that would create conflicts of interest.
What services do you offer? Some financial advisors have specializations in different areas of finance.
How are you paid? You’ll need to pay either a percentage of assets under management (AUM), a commission, or a fee to the financial advisor.
What’s your approach? Get a good sense of your financial advisor’s values by asking what they value and how they operate.
How will you track my financial progress? Asking this question can help you understand how your financial advisor intends to stay accountable to you for investment performance.
You can also find advisors through the financial advisor match service with Unbiased.
Get expert financial advice
When your financial advisor retires, you’ll need to review your financial plan, whether you stay with the firm or move your assets to another one.
You don’t have to navigate this decision alone. Unbiased can connect you with an advisor who can make the transfer easier and help you look at your plan with another set of eyes.
Content Writer
Alene Laney is an award-winning journalist for Unbiased, where she breaks down financial topics related to retirement, investing, and banking. She specializes in helping readers make the best decisions for their money with long-form content for brands and consumer publications.