How to break up with your financial adviser

There are a lot of Canadians who want to break up with their financial adviser, but just can’t bring themselves to do it.

For these people, the reasons for wanting to move their accounts elsewhere are obvious to them:

1. Their current adviser has been underperforming for years and has no real explanation as to why.

2. They receive very little or no communication from their adviser, especially during market downturns or times of volatility.

3. Their adviser is earning more in fees than they are earning in growth.

4. Their adviser works for a large firm or bank and the investor’s interests are taking a back seat to what’s in the best interest of the bank and their profits.

These investors know why they want to leave and find a new adviser yet they don’t actually pull the trigger. Why? What can cause a rational human being to not move themselves out of a bad situation when they know it’s the right thing to do?

There are quite a few reasons but the main ones are:

1. Their current adviser has a personal connection and they’re afraid what leaving or firing them will do to this.

This adviser might be a relative, neighbour or even a personal friend of the investor and no matter how poorly they are performing, you are still worried about hurting their feelings or damaging that outside relationship.

While this can be tough to move past, you must do it.

If the adviser is a professional, they will understand your needs to move on and respect them.

If they get defensive, break things of personally or simply throw a fit, that’s just further proof you’re not dealing with the right individual anyways.

2. The investor’s current portfolio has lost a lot of money and-or is in high-risk investments and they are waiting for things to turn around before they move.

I always tell people if you wouldn’t buy your portfolio today with new money you have to invest, you shouldn’t hold on to it any longer.

If you’re invested improperly by your current adviser they have already let you down.

Would you really rather hang on awhile longer in the hopes things will magically get better, or would you prefer to find a professional adviser to help you get back on track?

3. They have other financial products at the same institution and worry the bank holding their investments will punish them if they leave.

As crazy as this sounds, we hear this fear all the time and it’s a scare tactic used all too often.

The truth is, your mortgage will be just fine if you move your portfolio away and the bank will not take away your chequing account either. So how do you take the plunge? You can let them know in person or by email, whichever is easier for you.

The message doesn’t need to be complicated, either.

A simple: “Thank you for your help in the past. I will be going in another direction and will no longer be needing your services” will do.

If you’d rather avoid dialogue altogether, you don’t have to talk to them at all.

Your new adviser can fill out the necessary transfer forms and send them off for you and no communication on your end is required.

Breaking up with your financial adviser can be an emotional event, especially if you’ve been working with them for a long time.

But there certainly doesn’t need to be any shouting or guilt involved and you’ll feel much better once you’ve moved on to a professional adviser who is truly looking out for you.

If it’s time for you to move on, don’t delay another day.

It’s your money and you never need to be guilted into staying somewhere you don’t want to.