Signs it's time to ditch your financial adviser

Signs it's time to ditch your financial adviser

Leaving a financial adviser can be difficult, particularly if you've spent years sharing not only your financial information but also your triumphs, failures, hopes and fears.

But when you're no longer getting what you need, it's time to part ways. Here are a few big reasons to end the relationship:


The adviser is cagey about compensation

Some advisers don't make it easy to know the cost of their services.

"Would you work with a contractor who would not tell you how much he gets paid? No," says Rick Brooks, a certified financial planner in Solana Beach, California. And people shouldn't put up with that from an adviser, either.

Some earn a commission on annuities, mutual funds and other products they sell to you; others charge a fee based on the amount of assets they manage for you. Or an adviser may be paid a combination of fees and commissions.

Ask for the dollar amount you'll pay, says Ron Rhoades, director of the personal financial planning program at Western Kentucky University.

"When people hear percentage amounts, they tend to disregard that," he warns. When they hear a flat dollar amount, he says, it makes a much greater impact.

Communication is spotty

When you call or send an email, you should expect to hear back within 24 hours, unless an emergency has sprung up.

But if days or weeks go by without a word, or you only hear from the adviser when he's trying to sell you something, it's time to move on.

Your portfolio is off track

Any money manager can have a bad year, even Warren Buffett. And before you dump an adviser because of poor returns, make sure you're comparing apples to apples. For instance, if your portfolio is 60 percent stocks and 40 percent bonds, you can't compare your results with those of Standard & Poor's 500-stock index or your co-worker who aggressively invests 100 percent in stocks.

If your portfolio is way off one year and the adviser's explanation makes sense, give her another chance to deliver, says Rob Siegmann, chief operating officer with Total Wealth Planning, in Cincinnati. But if it's down the next year when the markets are up, get a second professional opinion, he says.

You spot red flags

Among the warning signs of potentially illegal behavior by an adviser: You stop getting statements, you're guaranteed a market-beating return or the adviser tells you to write checks to her instead of to her firm.


You should check an adviser's disciplinary records before hiring him. And after engaging an adviser, check his disciplinary record every two years, says Joseph Borg, director of the Alabama Securities Commission.

Find disciplinary records for investment advisers at and for brokers at You can also request disciplinary records from your state's securities regulator.

Eileen Ambrose is a senior editor at Kiplinger's Personal Finance magazine. Send your questions and comments to And for more on this and similar money topics, visit