From time to time, prospective clients reach out to us because they\u2019ve grown dissatisfied with their current investment advisor or money manager. This can be because they don\u2019t agree with the advisor\u2019s investment management approach (more on this below), the manager has appeared in the news in an unfavorable light, or because the client discovers that their values and those of the advisor don\u2019t align.<\/p>\n
But in almost every case, the prospective client is uncertain about how involved a move to a new advisor will be, and how long it will take.<\/p>\n
So, we\u2019re sharing with you today an outline of the steps involved in transitioning to a new advisory relationship.<\/p>\n
First, Your Homework<\/strong> Also, as part of your interview, you\u2019ll want to ask him\/her to share with you their investment philosophy. Broadly speaking, advisors\u2019 investment philosophies fall into one of two camps:<\/p>\n We\u2019ll share our thoughts on this active vs. passive philosophical divide with you in the coming days.<\/p>\n Getting Ready to Move<\/strong> Putting Things in Motion<\/strong> They\u2019ll then submit your signed forms to their custodian (for independent advisors, the custodian is typically Fidelity, Charles Schwab, TD Ameritrade, or Pershing).<\/p>\n The new custodian will initiate an electronic ACAT (Automated Customer Account Transfer) for your assets “in-kind”, meaning typically all of your investments will be moved over without anything needing to be sold.<\/p>\n Once your new accounts are opened, you\u2019ll be able to view them online at any time, and also decide whether you\u2019d like to receive account statements in paper or electronic form.<\/p>\n Going Forward<\/strong>
\nIf you\u2019ve decided to change advisors, you\u2019ll want to interview several to make sure that your new firm is a \u201cgood fit\u201d and will meet your needs. Because this will be a personal, hopefully long-term professional relationship, chemistry is important. Your advisor should be someone that you know, like and trust.<\/p>\n\n
\nOnce you\u2019ve selected your new advisor, you\u2019ll want to gather together information about your current accounts and investments:<\/p>\n\n
\nYour new advisor will have you sign new account application forms, and “transfer of asset” forms. The recent statements for your existing accounts will be included with this paperwork to ensure that all of your assets transfer over.<\/p>\n
\nOnce your assets have been transferred over to your new account(s), you should discuss how your advisor plans to implement the investment strategy you’ve agreed with them, and whether there will be any tax consequences.<\/p>\n