Ready For Retirement
Ready For Retirement
5 Signs You Should Fire Your Financial Advisor
Most people stay with the wrong financial advisor far too long: out of loyalty, inertia, or fear of starting over. But the cost of sticking with the wrong person can be measured in dollars, stress, and lost years you can’t get back.
5 Signs You Should Fire Your Financial Advisor
1. They always say “ask your CPA” instead of doing proactive tax planning (advisors don’t file returns, but tax planning is inseparable from investing and retirement decisions).
2. They only talk about investments and ignore taxes, retirement income, insurance, and estate planning.
3. You leave meetings confused—jargon and complexity replace clear explanations.
4. Your spouse/partner is ignored or left out of meetings and decisions.
5. You wouldn’t rehire them today if you were starting fresh.
A great advisor simplifies your life, coordinates every part of the plan, and speaks plainly. If that’s not your experience, it might be time to move on.
Ready to explore whether your advisory relationship is truly serving your best interests? Take an objective look at these warning signs and consider what advice your future self would give you today.
-
Advisory services are offered through Root Financial Partners, LLC, an SEC-registered investment adviser. This content is intended for informational and educational purposes only and should not be considered personalized investment, tax, or legal advice. Viewing this content does not create an advisory relationship. We do not provide tax preparation or legal services. Always consult an investment, tax or legal professional regarding your specific situation.
The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal.
Comments reflect the views of individual users and do not necessarily represent the views of Root Financial. They are not verified, may not be accurate, and should not be considered testimonials or endorsements
Participation in the Retirement Planning Academy or Early Retirement Academy does not create an advisory relationship with Root Financial. These programs are educational in nature and are not a substitute for personalized financial advice. Advisory services are offered only under a written agreement with Root Financial.
Create Your Custom Strategy ⬇️
If your financial advisor is guilty of any of the five things I'm going to talk about today, you should probably consider firing them Now. I personally am a financial advisor, so this is not about bashing advisors. Rather, it's about protecting your future and helping you realize the five red flags that it might be time to move on from the current advisor you're working with. I see far too many people stay with the wrong advisor because of a sense of loyalty or inertia, or maybe just a fear of starting over. But how do you know that it might be time for you to move on? Well, reason number one is if they continually tell you to ask your CPA anytime you ask a tax question, it's probably time to find a new advisor Now.
Speaker 1:Your advisor is not going to be preparing your tax return they can't give you formal legal tax advice in most cases but what they can do is a tremendous amount of tax planning. You cannot separate tax planning from your investment strategy, your retirement strategy, especially in your retirement years. So much of good investing, so much of good. Planning has to do with understanding the implications of various decisions you make when it comes to the taxes you will face, and the right tax strategy could add tens or hundreds of thousands of dollars, if not more, to the value of your plan over the course of your retirement. So if your advisor is always telling you to ask your CPA whenever you ask a tax question, it's probably for one of two reasons. Number one they're probably tied up with a firm that has such strict compliance requirements that they don't want any of their advisors talking about taxes for fear of liability. That's the case. Might not be your advisor's fault, but the firm they're with is handcuffing them. Maybe time to find a new advisor at a different firm? Or reason number two they just don't know. And if they don't know, there's no reason. There's no way they can possibly give you good, solid financial advice while separating the tax component of that advice. Everything is too intertwined, too interconnected for your advisor to be able to do the best job for you they can without understanding tax implications of things. So if your advisor tells you ask your CPA, might be time to find a new advisor. Reason number two it might be time to fire your advisor.
Speaker 1:Is they only focus on investments Now? If you go back in time 20, 30 years ago, the main value of a financial advisor was selecting investments. You didn't have all the accessibility, all the tools you have at your disposal today to go purchase investments on your own. So the only way in some cases to get access to investments or the easiest way was to have an advisor do it for you. But things have changed. Things have evolved. If all you're looking for is to have a diversified portfolio, a low cost portfolio, there's no need for an advisor. In that case, you're only paying your advisor a fee to do something you could do on your own or you could do at much lower cost.
Speaker 1:So if all your advisor is doing is that they're still operating in a way that things were done 30 plus years ago, your advisor should be focused on everything, and by everything I mean the investments piece, the tax piece, the retirement strategies piece, helping with insurance planning, with estate planning, understanding all the various things, all the nuances of how all this is connected. Because the reality is there are different things you can do to optimize each of those, whether it's investments, income taxes, insurance, et cetera. But if all you're looking at is one focused area and how to optimize that, there's a very good chance you're making trade-offs or leaving money on the table in other areas. So a good advisor is going to have a very well-rounded knowledge across all of these disciplines and apply that to you in a very unique way. A very unique way that not only helps you to optimize the financial side of things, but truly helps you get the most out of life with your money. The right advisor should help you live a better life. Your life should be better because of it, not just have the right investment portfolio. So if all your advisor ever talks about is investments, probably time to find a new advisor.
Speaker 1:The third reason it might be time to find a new advisor is you have no idea what they're saying. And if you walk away from a meeting with your advisor and you say I'm really confused, I have no idea what just happened, that's not on you, that's on your advisor. Your advisor should be able to articulate things in a very simple, understandable, digestible way. And if they're using jargon, if they're talking about complex strategies, that's not a you issue for not understanding, it's a them issue for not knowing what they're talking about well enough to articulate it to you. Albert Einstein once said if you can't explain it simply, you don't really know what you're talking about. That is especially true. I would argue with advisors. Now I'll take it a step further than that. If you don't understand anything that your advisor is talking about, it's for one of two reasons. Number one they don't really know what they're talking about. But if they use big words, if they talk in complexities, if they use jargon, they can mask their lack of ability to explain it simply by portraying it as something that you just don't understand, because maybe your knowledge isn't where it needs to be. So that's just them masking their inability to show that they actually have mastery of the things that a good advisor should have mastery of if they want the privilege and the right to be your advisor. That's potential number one. Potential number two maybe more nefarious is they don't want you to understand.
Speaker 1:Sometimes complexity sells. It's easier to overwhelm someone with complexity because then they're not gonna move on. By overcomplicating things, an advisor really a salesperson in this case knows that you're not gonna move on, you're not gonna go do something different. They can justify higher fees because it just hurts too much your brain to think through and actually understand what's going on. So instead of choosing something different, you just succumb to the complexity and say you know what, fine, let's just go ahead and do that. But if you are not understanding the things that your advisor's talking about and this could be very basic fundamentals of investing to the most complex estate planning and investment strategies does not matter. If you're not understanding it, it's not your fault. It's the fault of your advisor for not being able to communicate, which typically shows a lack of mastery or a lack of true understanding on their end. So if you don't understand what your advisor is saying, or maybe your spouse doesn't understand what your advisor is saying maybe time to find a new advisor.
Speaker 1:The fourth reason it might be time to find your advisor is they don't involve your spouse in any meetings. I can't tell you how many people come to us or root financial and they had an advisor, but they say the reason we're moving on is the advisor only talked to, in most cases the husband. In many cases it's the husband that's more involved in financial cases and the advisor won't even acknowledge the spouse. All eye contact, all focus, all attention is given to the husband and the spouse is sitting there saying well, I'm part of this too, and it's not always this case, but I find this to be the case more often than not. And here's the thing. In many cases, it might be the husband that's more involved with finances or makes more of the decisions, but that doesn't mean that that's the only person that matters, because when we're truly talking about financial planning, the money is just a tool to accomplish something bigger. And sure, maybe one spouse is more involved in the tool and the management of the tool, but both spouses are equally involved in what they want that tool to do for them, are equally involved in what they want their future together to be. So if your advisor is only talking to your husband or is only talking to your wife and you're sitting there feeling like, why am I not getting the attention? Why are they not acknowledging me? It's time to find a new advisor.
Speaker 1:Now, if you're the one watching this YouTube video, my guess is you are that spouse in your relationship, assuming you're married. So if you're finding that, you're finding that in my meetings with my financial advisor, my spouse doesn't get talked to, or maybe my spouse quite simply just doesn't attend because they're used to being ignored, they're used to being neglected you absolutely need both spouses to be involved. This does not mean you need to share the responsibility or the burden of making all the financial decisions, but, once again, the money is just the tool to accomplish the future that you want to live together. The future that you want to live into together is very much something that both of you share. What if something happened to you today? Put yourself in your spouse's issues. They've got to go reach out to an advisor that they have no relationship with, potentially even have some resentment for, and try to settle your affairs with them. It's not a great position for anyone to be in. So, regardless of who's the primary financial decision maker in that relationship, you need to have an advisor that involves both of you equally, that speaks to both of you equally, that has equal respect for both of you, understanding that the tools you have, the money you have, is going to fund both of your visions for what you want life to look like. And finally, the fifth reason you should fire your advisor is if you wouldn't rehire them today.
Speaker 1:So often, what we do, just as humans, is based on inertia. Why do we do this thing that way? Oh well, we've always done it that way. Why are we working with this advisor? Oh well, we hired them 10 years ago. It just feels too difficult to make a change. Well, one of the best things you can do and this is a universal principle across the board is look at the things you are doing in your life and say, if I wasn't already doing that, is that how I would continue or is that how I would choose to start doing things today? And if the answer is no, it means that the thing you're doing is not because it's the best thing, it's just the thing that you're used to. It's the thing that inertia is continuing to push you into doing.
Speaker 1:Take a step back the advisor that you have, the value that you're getting, the relationship that you have there. If you were not working with that advisor today, would you consciously decide to work with them starting now? The answer is yes, wonderful. That's how it should be. That means your advisor is adding value. That means your advisor no-transcript. Is it because they're a longtime friend and you don't want to rock the boat? Is it because a few years ago, when your parents passed, they helped you to open a couple accounts and transfer money into and you don't want to feel like you're letting them down by moving on? What is the reason you're with your advisor?
Speaker 1:And one thing that I find helps me personally when I'm making decisions like this is, I try to remove myself from the current state of where I am. In other words, I try to think of what would James 10 years from now? What will James 20 years from now? What would he recommend I do today? Because when we disassociate ourselves, when we think about our future selves, we think about that person in the same way we think about a stranger. And with a stranger it's very easy to provide objective advice. We remove the emotional aspect of it and we feel like they can provide objective advice. But when we're in the midst of it, emotions are involved, biases are involved, fear is involved and it tends to disallow us from making the most objective decision. So think about it. What would yourself in 10 years from now? What advice would they give you about your current advisory relationship? If they would say keep it amazing, job well done, you have a great advisor. But if they would say you know what? Job well done, you have a great advisor. But if they would say you know what, it at least makes sense to see who else is out there, maybe that's an indication that it's time to move on from your current advisor. Now quick bonus point on this At Root Financial, where I'm the CEO and the founder of, we have dozens and dozens and dozens of people every single month reaching out to us saying look, we're interested in potentially working with you, but we want to understand more about what that looks like.
Speaker 1:When people see what that work looks like and they want to move forward and start to work with Root Financial, a common question is well, how do I actually go about breaking up with my old advisor? It can be awkward. It can be difficult to do so. This is where it depends upon the level of your relationship with them. If you don't feel like there's much of a relationship, you don't even have to tell them.
Speaker 1:People are sometimes surprised at how easy it is to move money to a different advisor. If you want to move money to a different advisor, you don't even have to involve your current advisor. If your money, for example, is at Fidelity and you want to move it to a Charles Schwab or vice versa, you simply open up accounts at the new institution and transfer the money in kind. The advisor is actually not part of all that, and that's because your advisor doesn't own your accounts ever. If you're working with a third party institution as your custodian. You always own your accounts, which means you can always do with them what you want. You don't need to get your advisor involved Now, depending on the brokerage from the advisors with, that may or may not be true, but in many cases it's much easier than people actually think.
Speaker 1:It is the second thing that you can do. If you don't want to just move your account but you do want to break up with your advisor, a simple email should suffice. Something that's respectful but quick and to the point. Dear James, thank you for the time together. Really appreciate all the work that you've done for me. Based on our current financial situation, I've decided to move to XYZ Advisor. You'll be noticing that the accounts are transferring out. Thank you in advance. Wish you all the best. Simple, to the point, respectful move on Advisor's notified, but you can still simply move your accounts out.
Speaker 1:Now, if it is a longtime friend or someone that you do have a deeper relationship with, you can go so far as to set up a call and have a conversation with them and give them details on why you're moving, if you choose to do so.
Speaker 1:But I would still advise send an email ahead of time. Make sure they understand that you've already made up your mind. Make sure they understand that you've already made up your mind. You've already made the decision but due to respect for the relationship and for them, you're happy to hop on a call and provide details as needed. But as we wrap up, today, I don't actually think everybody needs an advisor, but for those that do have an advisor or need an advisor, the right advisor can be worth an incredible amount, not just to their financial benefit, but to the long-term benefit and peace of mind that a good advisor can provide. But it's really important you find the right advisor, and a part of that is looking at your current advisory relationship, seeing if any of these potential red flags exist and, if so, moving on to one that is better for you in your situation. You.
