| How do I leave a financial advisor relationship?

How do I leave a financial advisor relationship?

Andrew F asked:


I’ve been working with a financial advisor for 5 years and I trust his judgement. However, now I feel more and more confident in mangaging my own finances and investments and I’m questioning the $600 yearly planning fee.

In addition to the $600, my advisor wants me to convert to “asset-based” plan where he will charge me a fee calculated as a percentage (1.25%) of assets managed.

Despite my confidence in him these rates seem higher than the value he is adding on a yearly basis. I’m thinking of leaving the relationship and putting my money into low-cost, market index funds but worry about penalties, taxes, etc. Can you help me?

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Comments

One Response to “How do I leave a financial advisor relationship?”

  1. crapaudblanc on April 4th, 2009 1:49 am

    If you confident you want to leave it is easy just tell him. If your money is managed by him, find a brokerage house andthey will help you move the funds and securities automatically.
    If you net worth is significant (i.e. over $500K or $1M) I would go with a brokerage house like Merrill Lynch. They offer an MLPA account and you can negotiate fee down to about 90 basis 0.9%, they also have the Beyond Banking were you could move your fixed income securities and keep them outside of the fee account. Below $500K I would go with Schwab and buy several funds (low cost or other). I do belive that you can do better than a market index fund if you know what you are doing, and definitely a must if you want to diversify (i.e. some bonds, some Muni for taxes, some foreign stock funds, some market index, some growth stock, some goldd index fund,….). Both ML and Schwab also offer managed accounts (these have done wonder for me).
    Good luck.