When should you break up with your financial advisor?
There are some relationships that last forever, and some relationships that are bound to end someday. Same can be said about the financial advisor. There might be some events in life which may give you signs about breaking up with your financial advisor. But sometimes we don’t understand the signs, may be due to lack of knowledge or due to the brand you are associated with. So, when do you know that you have to end the relationship? Here, we discuss some tips.
Change in advice
Situations do not remain the same in our lives, and accordingly, personal finance plans change. This means when a situation in life changes, the prior advice given by the financial advisor for your wealth creation is no more of use. Rather it’s time for a review and the financial advisor is expected to suggest some changes, if any, in accordance to the changes in life. However, if the advisor fails to suggest any valuable change, then you should consider breaking up with your financial advisor and hire someone else.
Communication
To have an idea on what’s going on with your personal finances it is necessary on part of your financial advisor to communicate with you periodically, say every quarter, if not regularly. This helps you to understand where you currently stand and if any actions pending form your end. Communication is the most important part as it may happen that your financial advisor has suggested some product, but that product is no longer helping you in achieving your financial goals. At this time, it is the duty of the financial advisor to communicate the same with you and advice you properly. If your advisor doesn’t communicate with you then you should think of breaking up with him/her.
Fees
Fees really matters as you need to be assured that the fees charged by your financial advisor are justified for the services he/she offers you. Your financial advisor must explain you the fee structure before on-boarding you. There are financial advisors in market who market themselves as free financial advisors. But there is a catch. Nothing in this world comes for free. Either your financial advisor has hidden fees or they are getting commissions or incentives from the product manufacturers. Even there are financial advisors who charge upfront fees but are not able to justify them. So, if your financial advisor has any of these fee structures, then it’s time to break up with him/her.