How To Change Your Financial Advisor

In most cases, your assets can transfer as is (or “in-kind”), so there’s no need to liquidate holdings before signing on with your new advisory team. You should take a look at your agreement with your current advisor, but in most cases there is no advance notice required or assets that will be automatically liquidated when terminating the relationship.

Typically, when working with a fee-only fiduciary firm, your assets will transfer in-kind from one custodian to another; this means that, with very few exceptions, your existing investments don’t have to be sold. This helps avoid the tax consequences of any capital gains being realized. Your new advisory team should review your investment plan with you prior to the sale of any existing investments.

Many advisors, including Glassman Wealth, utilize a third-party custodian, e.g. Charles Schwab or Fidelity, where your assets will be held. Unless your accounts are already held with the custodian, you will need to open new accounts, but your advisor will make this process seamless and quick.

You don’t even need to notify your current advisor that you’re switching (although we recommend you do). In some cases, we’ve seen that the former advisor doesn’t even realize that your assets have left, because they’re not watching the accounts.

Your new advisor will prepare the paperwork and talk you through it, so this part is easy. There are normally just a few signatures – one form to open your account, another to transfer your assets, and a contract outlining your agreement with the new advisor.

Many of our clients come to us with accounts in multiple places: perhaps at a discount brokerage like Schwab, accounts with a broker, maybe an old 401(k), and some excess cash in a checking account. Even in these cases, consolidating your assets with your new advisor rarely takes more than a few signatures.

Transferring your investment accounts from one custodian to another normally takes about two weeks. Rolling over a 401(k) or other account can take a bit longer, as this typically requires a check to be sent from the 401(k) plan. Your advisory team should keep you updated throughout the transfer process, and can begin planning and working with you prior to the funds arriving.

After you meet with your advisory team to open your accounts, next comes the fun part: building your relationship and your overall plan with your new team.