6 steps to navigating the process and red tape of switching financial advisers

Louisville, KY—March 30, 2017—Individuals leave their financial advisers for a variety of reasons. “According to industry experts, reasons for leaving a financial adviser include moving, going through a crisis, wanting to reduce fees, not wanting to pay fees, feeling disconnected, feeling ignored or taken advantage of and feeling insecure due to external economic events,” said Carla Dearing, CEO of SUM180, an online financial planning service designed to make financial planning simple and affordable.

“This year, the much-debated new fiduciary rule—delayed for the time being by the Department of Labor—has given many individuals another good reason to consider switching advisers. Regardless of when or whether the fiduciary standard is implemented industry-wide, it makes sense to choose an adviser who is a fiduciary and acts in clients’ best interests when providing advice versus providing the merely ‘suitable’ advice required of a commission-based agent or stockbroker,” Carla continued.

“Whatever the reason for termination, ending a relationship with someone who has detailed knowledge of your life and finances can be emotionally charged and judgement clouding. Having a roadmap to follow when making a switch to a new advisor helps smooth the process,” Carla added.

To ensure an uneventful transition from one financial adviser to another, Carla offers the following six tips:

  1. Secure your landing before you jump ship.  Begin the planning process with your new adviser before you notify your old advisor of your plans to terminate their service, and expect to have a period of overlap between your old and new accounts.
  2. You’re starting over – embrace the process. Switching financial advisers should be more than a mechanical transfer – ideally, it’s a chance to reassess your goals and strategies with a new adviser and a fresh perspective. Expect to start from zero and go through the entire financial planning process again, step by step. This may seem tedious at first, but be patient. Having a new plan that accurately reflects your current priorities and circumstances will be worth it. It’s okay to provide copies of your statements and documents from your old adviser to your new one, but you may also have to dig for additional documentation to complete your picture.
  3. Out with the old. Once you activate your accounts with your new adviser, your new account authorizations will trigger the issue of terminating your old ones.  You can request that your new adviser handle this step on your behalf; you sign the transfer papers and allow your new advisor to take it from there.  However, don’t leave it at that. Contact your old adviser and obtain proof of rescission of his or her authority to trade your account. You’ll likely want to skip the face-to-face exit meeting with the old adviser (which has the potential to get emotional) but do whatever it takes to confirm that your account is terminated.
  4. The transfer may take a while.  How big of a deal the transfer of your actual holdings is depends on what you owned in your old account.  If the securities in your old account are held by a third party, they won’t move at all, the authorization to access them will just change from your old advisor to your new advisor.  This applies to holdings like stocks, bonds, cash, and most mutual funds.  On the other hand, if you were invested in proprietary funds offered by your old advisor, it could take months to liquidate your holdings and transfer them. Be aware that there may be asset transfer fees, although they are not likely to be more than $100. Certain mutual funds also have holding period requirements. If you sell before the period ends, you will incur a penalty fee – usually about 1%.
  5. Moving your assets may trigger tax consequences.  If all you’re doing is transferring publicly available securities from one brokerage to another; the transfer occurs electronically and, since there is no actual sale involved, there won’t be any tax implications.  However, the sale of any securities (especially of proprietary products in your current account) will trigger tax consequences, so involve your accountant in the planning of this move.
  6. Transfer delays happen, so prepare accordingly. Expect your assets to be inaccessible to you for a period of time during the transfer process. You want to be sure you have enough cash separately available to you and, if you use a credit card, that your card is not linked to the account being transferred.

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About SUM180

SUM180 is an online financial planning service designed to make planning and dealing with your money simple and affordable.
Specifically, SUM180 is differentiated in the following ways:

  • SUM180 meets people where they are. SUM180 plans are personalized to help people wherever they are right now on their financial journey; whether they’re just beginning, starting over or well on their way.
  • SUM180 plans are simple. They start with only the three (3) most important next steps, making them easier to accomplish, and gives clients a clear picture of where they are.
  • SUM180 doesn’t assume clients want to become financial experts to meet their financial goals. SUM180 provides the tools they need, without overwhelming them with “education” and details they don’t need.
  • SUM180 offers a community for users, unfiltered, which allows them to explore and share.
  • SUM180 serves; never sells. Earning and keeping client trust is SUM180’s highest priority. SUM180 never makes commissions from any of its recommendations, ever.

Additional information about SUM180 may be found at https://sum180.com/.

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Robin Schoen
Robin Schoen Public Relations
215.504.2122 office
215.595.7542 mobile