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Money Matters
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How to Help When Someone Asks “How Do I Change Financial Advisors?”

When considering changing financial advisors, several factors come into play. You may know someone contemplating this transition, whether prompted by a firm acquisition, shifts in investment philosophy, or service changes. Knowing the circumstances that may warrant a change and the transition process is essential. Do you know someone looking for stability, trusted guidance, and a long-term advisor relationship? This blog post will share why clients change advisors and provide insights into navigating this shift.

What to Do If You’re No Longer Happy with an Advisor 

For several reasons, a friend or colleague may want to select a new advisor for their financial needs, whether due to a natural progression or sudden change. Common triggers may include:

#1 Services have changed

When a firm goes through substantial shifts, such as a merger or acquisition, services may no longer align with a client’s financial needs or life stage. In this case, clients may find they’re no longer the ideal client type, which hinders relationships or options. This puts clients into a position where they must weigh their loyalty to the relationship against their own needs and decide whether it’s time to make a switch.

#2 Expectations for the client-advisor relationship have changed

As firms expand to accommodate new clients and growth goals, expectations for the client-advisor relationship may change. Updated performance metrics could affect the client-to-advisor ratio, hinder communication or access, or shift the client to a new advisor entirely. Clients accustomed to direct access and a close, personal relationship with their current advisor may seek a firm better aligned with their preferences.

#3 Potential new conflicts of interest exist

If clients have been working with a fiduciary, they’ll likely continue operating within that standard. However, with growth or a merger, a firm may transition from a fee-only to a fee-based model. Sometimes, at fee-based firms, advisors may be encouraged to recommend services such as insurance or annuities, which may not suit a client’s needs. It’s also not uncommon for larger firms to have in-house departments to handle services previously managed by referral partners, such as tax planning, insurance, and more. While it can be appealing to have everything in-house, it may also raise concerns about potential conflicts of interest.

#4 The advisor is retiring soon

A client may not be unhappy with their advisor; instead, an advisor’s approaching retirement could necessitate a change. Clients must determine if they are staying at a firm for their team, philosophy, and approach or if their loyalty is exclusively tied to the advisor. With a retirement, it might be time to consider a move. 

Do you know someone whose advisor is no longer a right fit? It’s an excellent opportunity to engage in fresh conversations; drill down into needs, values, and preferences; and identify a firm best suited for them. The following steps involve interviewing and selecting new firms and advisors and initiating the process of transferring accounts and assets.

How to Choose a New Financial Advisor

There are many financial advisors to choose from, which may feel overwhelming when considering a transition. However, the process can be illuminating, empowering, and better informed when armed with the right information and questions to ask. At CCMI, we understand not everyone may be familiar with our industry, some of the issues we’ve seen, or overlooked aspects of a firm’s approach. When we bring on new clients, we often share and address questions proactively to ensure a seamless transition to our firm. When interviewing potential firms and advisors, clients may consider asking a potential advisor these 10 questions to start a meaningful conversation:

#1 Are you held to a fiduciary standard? 

Fiduciaries have an ethical and legal obligation to act in a client’s best interest, guided by a single objective: helping the client succeed financially. The goal and purpose is to minimize conflicts of interest and enhance transparency in the client-advisor relationship. A non-fiduciary advisor may be swayed by other factors, such as commissions or in-house products, potentially influencing their recommendations. It’s worth considering if their advice consistently aligns with the client’s overarching financial goals.

#2 How do clients pay the firm?

Compensation for the advisor is underscored by the distinction between fee-only and fee-based firms. Advisors held to a fiduciary standard, often associated with a fee-only model, are only paid by clients through a straightforward payment structure that favors the client. Without a commission incentive, fee-only advisors can concentrate on tailoring recommendations to align with a client’s goals.

On the other hand, fee-based advisors may receive commissions or “kickbacks” tied to recommended services and products. Not every fee-based advisor prioritizes personal gain but there is an incentive to make recommendations that benefit them, which could pose a conflict. These are questions worth exploring.

#3 What are your qualifications?

There are some basics clients will want to look for. Financial advisors may have additional credentials to serve particular clients better. For example, at CCMI, all our advisors are CERTIFIED FINANCIAL PLANNER™ professionals. Some of our professionals have also undergone specialized training in areas such as tax planning, planning for business owners, estate planning, and life transitions. Clients can discuss their unique needs to determine if the potential advisor is well-equipped to address them.

#4 What is your investment philosophy?

A firm’s investment philosophy refers to its approach, how it selects investments, proprietary strategies, custodial partnerships, and more. A potential advisor should outline factors influencing their investment strategies, such as how they view risk, returns, investment time horizon, and asset allocation. Firms like CCMI will develop portfolio strategies personalized to each client, typically caution against high-risk investments, and focus on long-term planning.

#5 How will my investments be allocated?

Asset allocation refers to how funds are distributed across asset classes, such as stocks, bonds, mutual funds, and exchange-traded funds (ETFs). It also considers client preferences, goals, time horizons, and market conditions. The aim is to create a balanced yet flexible portfolio that aligns with the client’s risk profile and objectives.

It’s also important to discuss if the firm only recommends proprietary or third-party products, which may introduce a conflict of interest, affect tax planning, or require a specific custodian.

#6 How will taxes be factored into my portfolio?

There are many tax-planning opportunities within investment management. Ask how the advisor implements strategies such as using tax-advantaged accounts, tax-loss harvesting, withdrawal planning, and efficient asset allocation. 

#7 Who is your custodian?

A custodian is a financial institution that administers, protects, and holds a client’s assets. Clients may ask if their current custodian is a partner or if they must switch to a new custodian. A firm’s custodian may affect total fees, access to investment options, or client portals. Whether or not a switch is necessary, having a conversation around this can be enlightening and help clients make the right choice for themselves. 

#8 What are my total costs?

Ensure a potential advisor outlines total fees and expenses with transparency. Total costs typically include advisory fees to manage investments whether or not the client makes money, custodial fees for trading and other transactions, and potentially others. It is crucial to review a firm’s fee schedule, compare it with other firms, and understand how fees are calculated and assessed. 

#9 How will our client-advisor relationship work?

Financial planners vary in process, philosophy, and communication. Ask how the client-advisor relationship will look and feel today and in the future. Are they a discretionary advisor who will make decisions on the client’s behalf with less frequent meetings and periodic reports? Or are they a non-discretionary advisor who offers a more collaborative experience and gains the client’s approval before making changes?

Clients may want to find out if the advisor works with a team they have access to or if they work one-on-one with the client.

Clients can also discuss how long the advisor can commit to their relationship. For example, does their age and career stage align with serving the client and possibly their children for years to come? Do they also have a succession plan when retirement occurs and new advisors step in?

#10 Why should I choose your firm?

The deciding factor may be what makes the firm stand apart from the vast sea of options available. A firm’s differentiators may include client service and satisfaction, transparent practices, customization, cost-effectiveness, range of options, socially responsible investing, and other important factors. Ultimately, it’s the client’s choice.

How Do I Move from One Financial Advisor to Another?

Once a client has chosen a new advisor, they can initiate the process of transferring accounts. Fortunately, beyond signing paperwork, the process is much more straightforward than clients may expect, with the new advisor managing much of the work. 

What do I need to do when changing advisors?

  • Notify the current advisor: Clients may consider notifying their current advisor of the decision as a courtesy; however, it is not mandatory.
  • Ask about transferable investments, timeline, and disruptions: Clients should ask the new advisor which investments can transfer, how long the process will take, and if there will be any disruptions in their investment activity. For example, with the exception of some illiquid investments, such as private equity assets that may take longer to process, accounts and assets may transfer within a week. 
  • Consider strategy reassessment: Clients can take the opportunity to reassess and refresh their strategy, discussing any changes in lifestyle or goals with the new advisor to ensure the investment approach aligns.

How CCMI Can Help

Switching financial advisors can feel daunting, especially if a client is considering ending a long-term relationship. At CCMI, we strive to simplify the guidance and onboarding experience for new clients. Our team acts as a resource, offering insights and addressing questions that will help clients make more informed decisions. A proactive approach will help ensure a smooth transition, positioning the client for success with a new advisor.

If you know someone searching for a fee-only firm emphasizing integrity and a client-first financial planning mentality, with no plans to sell or merge, we invite you to introduce them to CCMI. They can contact us directly or visit our website to learn more about our investment approach, client experience, and values. We look forward to the opportunity to meet and assist them on their financial journey.


PLEASE SEE IMPORTANT DISCLOSURE INFORMATION at https://myccmi.com/important-disclosures/




CCMI provides personalized fee-only financial planning and investment management services to business owners, professionals, individuals and families in San Diego and throughout the country. CCMI has a team of CERTIFIED FINANCIAL PLANNERTM professionals who act as fiduciaries, which means our clients’ interests always come first.
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