Date: August 9, 2021

7 Reasons You May Want to Switch Financial Advisors

Your financial advisor owes you attentive, personalized service that produces successful results. Unfortunately, some financial advisors tend to take their clients for granted. Others turn out to be disappointments for a variety of reasons.

You don’t have to put up with a financial advisor who falls short of your expectations and requirements. Instead, you can exercise your prerogative to switch to a new financial advisor who will provide you the treatment you deserve.

How? Check out our new guide: Switching Financial Advisors.

At Heritage Capital, we often meet with new clients who are seeking a second opinion. They’re either unhappy with the service they’re getting from their current financial advisor, or the results they were promised (a major red flag) are not coming to fruition. When it comes to finding a financial advisor for high net worth individuals, these promises can be even more spectacular as they battle for your business. It’s important to weed through the sales pitches and figure out who will actually provide the active portfolio management strategies and comprehensive financial planning services that make sense for you.

Working with the wrong financial advisor is one of the more common mistakes we see investors make. Don’t be one of them! Don’t feel guilty about making a switch. It’s your financial future that is at stake.

In our opinion, there are 7 reasons why you may want to find a new financial advisor. Any one of them alone is a good reason to switch, but if two or more apply, it’s high time to make a move.


Ready for a second opinion? Schedule a no-obligation conversation with the team at Heritage Capital to see how we can help.


1. Feelings of Abandonment

Is your financial advisor ignoring you? Tell-tale signs include:

  • Not returning your phone calls or emails.
  • Not responding to questions.
  • Not listening to your concerns.
  • Sounding impatient.
  • Not initiating phone calls.
  • Not scheduling update meetings.
  • Only calling you to urge you to make a trade.

The above can be red flags that signify a basic lack of respect for you as a person, or taking you for granted. At Heritage Capital, this kind of behavior is unacceptable!

We believe that a financial advisor should take the initiative, contacting you regularly and welcoming your phone calls and emails. If a financial advisor is busy when you call, he or she should immediately make an appointment to call you back (and keep it).


2. Bad Performance

If you are meeting regularly with your financial advisor, are you reviewing your portfolio performance? Regular reviews allow you to compare your performance to the standard benchmarks for domestic stocks, international stocks, bonds and so forth. Comparisons are important to provide context. For example, the 10 percent return on your domestic equities might look good simply because your financial advisor neglects to mention that the S&P 500 or some other equity benchmark returned 18 percent.

Signs of bad performance include more than underperforming the benchmarks though.

Other signs include lots of churning into and out of investment vehicles, resulting in high commissions, transaction and sales fees. Anyone can experience a bad quarter, especially during volatile markets, but if your performance continues to be subpar, ask for an explanation, then decide whether to give your financial advisor another chance. If looking for a financial advisor for the first time, find someone who has a successful track record who is not afraid to compare results with the appropriate benchmarks.


3. Unclear Expectations

You may know exactly what you want, or you may need help figuring it out. In either case, a financial advisor’s job is to clarify your expectations and explain what he or she is doing to meet them. Make sure your financial advisor has a clear understanding about what your expectations are; not some vague cliché like “to make money.”

This is especially important when it comes to hiring a financial advisor for high net worth individuals. Failure to communicate at this basic level can be very disconcerting. If your financial advisor does not fully understand your expectations, your long-term goals might not be met.


4. Changing Needs

As your financial life become more complex, it’s crucial for your financial advisor to be able to address any new needs and goals. If your financial advisor simply lacks the required experience needed or you feel he or she may be in over their head, get a second opinion.

Like any relationship, you may outgrow your financial advisor’s ability to meet your needs. The financial advisor might have been fine when you were younger and were just getting started, but is he or she up to the task of managing a wealthy client with specific needs? This is an important question to ask.


5. Personality Clash

You and your financial advisor don’t need to be best friends – in fact, choosing a financial advisor based solely on their personality is a major mistake some investors make. Any good salesperson knows how to talk to someone. However, there should be, at the very least, a mutual respect. Unfortunately, it doesn’t always turn out that way.

Signs of a problem include not wanting to call your financial advisor, or feelings of impatience, disapproval or anger when you do speak with him or her. It’s your money, so there is no room for conflict.


6. Lack of Trust

Lack of trust is a killer. You can’t work with a financial advisor you don’t trust, especially when there are concrete examples of suspicious behavior. This might include:

  • Switching products without articulating why.
  • Constant pressure to invest more.
  • Pushing investments that a financial advisor has a financial interest in without disclosing so.
  • Overcharging you and/or refusal to work for a fixed fee.

Your financial advisor should offer you a copy of Form ADV, which discloses his or her commission arrangements and conflicts, whenever it changes. You can get a copy by searching the SEC’s Investment Adviser Public Disclosure website.

If you find yourself paying fees that you never discussed with your financial advisor, this is a red flag! For other warning signs, read our recent blog post: How to Tell a Good Financial Advisor from a Bad One.


7. Lack of Transparency

We also feel at Heritage Capital that you should be receiving quarterly reports that explain your investments as well as your active portfolio management strategies. At the very least, you should get straight answers to simple questions about things you have the right to know, especially after persistent requests.

Transparency is a critical part of building trust with a financial advisor. Hiding information from you is a form of lying. If you ask questions, make sure you get the answers in writing. If you feel it’s time for a second opinion, get one!


The Bottom Line

If you are not satisfied with your financial advisor, it’s up to you to change the situation – don’t expect your financial advisor to do so. “Breaking up” can be temporarily uncomfortable, but you owe it to yourself (and your family) to receive the best possible stewardship of your wealth. That means working with a financial advisor who treats you with respect and is able to help you reach your financial goals.

Choosing a financial advisor to work with is one of the most important financial decisions you will make. This person can affect when you can retire, how you can retire and what you’re able to leave behind when you’re gone. If you’re unsure, get a second opinion!

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Paul Schatz, President, Heritage Capital