3 Reasons to Change Financial Advisors

Most people stick with their financial decisions. No matter what the performance, human nature makes it difficult to change course. It doesn’t surprise me when I sit down with prospective clients and give them a second opinion on their investments and financial plans that they cannot seem to make that change.  They clearly recognize that they need to do something.

I don’t believe in knee-jerk reactions, especially when it comes to investment performance. I do think there are perfectly good reasons to change financial advisors. I’ll share with you a few reasons you may want to consider dumping your advisor. Here are a few:

The Disappearing Advisor
One of the biggest reasons that investment clients choose another advisor is poor customer service. If you call your advisor and he or she never seems to get back to you, or answer difficult questions, it may be time to make a switch. If an advisor seems to dismiss your concerns it may be time to make a change. I find it simply bad form to ignore your clients. You pay good money for your financial advisor’s time, so you deserve the best possible treatment and advice. If you aren’t getting treated well, it’s time to find a new advisor.

The Underperforming Advisor
Don’t ignore performance. Bad performance should be considered as a reason for changing advisors. Now I tread lightly here, because performance is very subjective. If your investments have not performed well over an extended period of time, such as several years, and failed to meet your goals and objectives, then a change should be considered.  Performance must be compared relative to other benchmarks and the investment environment you are in currently. Don’t fire an advisor just because your investment went down due to economic conditions.

The Successful Advisor
The last reason sounds a little counter-intuitive. You may want to change if your advisor is becoming too successful. What I mean is if the advisor adds too many clients and time with you is significantly reduced. Nobody will fault someone for being successful, but you need your advice too. The worst is when an advisor pawns you off to a junior advisor. You deserve the best advice and service, or at least the same service you previously received. If you’re not getting it, consider moving on.

Breaking up is hard to do. It can be difficult to switch advisors particularly if you are on friendly terms. Nobody wants to fire a friend, but that’s exactly what you gotta do if that friend is failing you. If you would like a second opinion on your portfolio, write me at david@lexwealth.com, or call me at (859) 225-2596.