If you’re considering changing your financial planner, careful planning is essential for a smooth transition to a new firm. There are key steps and important considerations to keep in mind. In this guide, we’ll explore some factors to be aware of when switching to a new financial planner.
Why should you switch your financial planner?
There are a number of reasons why you might be thinking of moving to a new financial planner. These could include communication issues, poor performance, or a change in your own personal circumstances.
- The service no longer meets your requirements – Sometimes, although your current planner is working well for you, the reason for wanting to switch doesn’t have anything to do with performance. However, your current firm may not be able to provide the service you now need. For example, you might be moving abroad, and your current planner isn’t able to support you in your new location. In this type of situation your planner is likely to be understanding and may even refer you to someone that could help, so it might be worth contacting them to discuss your thought process and changing requirements.
- A difference of approach– Understanding any particular preferences you’d like reflected in your financial planning and/or investment portfolio is important. It’s just as vital for your planner to properly manage your portfolio according to these preferences. If there seems to be a difference of approach or you feel your concerns aren’t being addressed, it might be time to look elsewhere.
- Investment performance –You are likely to have taken professional advice to support your investment performance over the long-term, but if your goals aren’t being met it might be worth investigating further. Do keep in mind that no matter who you have as your planner your investments are likely to follow market trends and it’s always best to have a long-term view. In this situation it can help to arrange an update with your planner to establish expectations within the current climate and in line with your attitude to risk.
- Lack of communication– although very few firms offer 24/7 service, if you’re finding it increasingly difficult to reach your planner or receive feedback on your enquiries it can be useful to re-evaluate and consider your options.
The cost of changing your planner
Unfortunately like many aspects of life, changing your financial planner could come with a cost depending on the terms you signed. You may need to carefully review any paperwork and the contract you originally agreed with them.
You may also need to pay fees relating to some of the investments you hold, depending on particular terms. For example, some funds might still be in a holding period and subject to early withdrawal or transfer fees.
How to change your financial planner
When deciding to leave your current planner it’s extremely important to make yourself aware of the fine print. Read over your contract with them to determine your current obligations, notice periods or any fees involved and how they handle transfers.
Once you have reviewed these details, you could also request a copy of records held by your current planner’s firm. These would be transferred to your new planner but are still useful to have for your own records.
Letting your current planner know you’ve made the decision to move elsewhere can be a difficult step, or a relief depending on your circumstances and the state of your relationship with them. It’s usually best to write a letter or an email to inform your planner of your decision, so you have a record of the communication. If you have already chosen and appointed a new planner, they may also be able to help you with the transfer process.
What to look for in a financial planner
A good place to start your search for a replacement planner is to consider the services you need. When researching it’s key that the firm or planner you choose has expertise in that field you’re looking for. Taking a holistic approach to the type of advice you require can also be useful, as some firms might be able to help you in more areas than others, such as estate planning or international advice.
It’s important to note that in most regions, financial planners need to comply with certain standards of conduct and are regulated by a financial body or institution. In the UK, planners are governed by the Financial Conduct Authority (FCA). This body investigates complaints and ensures that planners work for the good of their clients, not for their own self-interest or financial profit.
Choosing an accredited Chartered Financial Planning firm offers peace of mind and an assurance of their ongoing commitment to provide the very best service, advice, and support. Less than 10% of all financial planning companies in the UK hold Chartered status, which is considered the ‘gold standard’ in the industry. A great resource to get you started on your search would be the FTAdviser’s Top 100 Advisers a great independent source of information to help you find a new planner.
Questions to ask when looking for a planner
Once you’ve shortlisted some options there are a series of key questions it’s useful to run through.
Are you independent?
Determining whether a planner is independent or restricted in the services that they offer is a good place to start. Those who are truly independent can offer solutions from the full range of financial products available. Those who are restricted are limited to offering only products that their provider has available.
What fees should I expect?
Typically, firms who are managing your investments work on a management fee, which is usually calculated as a percentage of your portfolio holding. Planners who aren’t independent may offer a cheaper fee but are usually unable to offer advice that is outside of their company’s approved product list.
Do you offer an initial meeting?
It’s worth considering meeting your preferred planner face to face to make sure you feel they’re a good fit and someone you’d be happy to work with. Find out who will be your main point of contact too and confirm the best methods of communication for both of you. It’s also great to find out if your initial meeting is at their expense and free of charge.
What do your existing clients think about your service?
Whether the firm you are considering has an impartial feedback service, which offers a method of reviewing what others think. Many firms with solid reputations offer this and are proud that many new clients reach them through recommendations and referrals.
What services do you offer?
If you are keen to properly manage all aspects of your finances, it can be useful to get a good understanding of what services the new planner offers. For example, they may be able to manage your Tax Return or investment portfolio but struggle when it comes to Estate planning or Will writing. Working with a firm who can provide a co-ordinated service can help make sure that any decisions you make aren’t in isolation.
Choosing a new financial planner
Choosing a new financial planner is not a job to be rushed. Finding the right person to advise you on your financial circumstances is an important step, and one that will ideally stand the test of time, enabling you to build a long-term and trusted connection, and support you in your steps in achieving financial freedom.
To find more support with your finances, you can contact our team of professional financial planners today.
