Empower your Management with the Best Sales Advisory Process

How to create outlook signature

When you're working with a financial advisor, it's critical to work with somebody who has the skills and expertise you need, and it's also important to have somebody who you trust[and who's a good fit for you personally]. So, that's what we're going to talk about here. By the end of the video, you're going to understand what it looks like to make that change, you'll see some of the costs and pitfalls of changing advisors, you'll maybe get some validation on when it's to move on, and we're just going to hopefully make it all go smoothly for you... So, starting with some of the biggest costs down to "less big" costs, we have taxes. If you have investments that you've been holding for many years, there may be big gains in those investments, so if you have to sell, that can generate a big tax bill for you. Sometimes that's what you have to do to switch advisors, and that's not always the case, but if it is... You want to be aware of this. Now, in retirement accounts like an IRA or a Roth IRA, this is not an issue because it's typically not a taxable event to sell your investments in those accounts. But if you have taxable accounts like an individual or a joint account, there may be consequences when you sell. One of the ways around this is to move the assets "in kind" That way, you don't have to sell everything to generate cash and move the cash. You can move the actual investments themselves or the shares of mutual funds, for example, over to your new advisor. There are a couple of other reasons to do that, and we'll get to that in a second. The next might be annuity surrender charges. If you have money in an annuity, it may cost you money to take that out. The insurance company may charge you a penalty if you take withdraws within a certain number of years, and those penalties can last seven or 10 years, and they can be substantial. It might be 8% of the amount you take out, for example, it just depends on the annuity you have and how long you've had it. One of the ways to manage this is to possibly wait it out. If you only have one or two years left before that surrender charge goes away, you might consider just waiting, and another idea is to look at doing your "free amount" each year. You might be able to take 10% of your account balance out each year without incurring surrender charges, so that's another way to approach this and hopefully avoid some of the costs that you don't need to pay. Next, we have commissions to liquidate. If you have a lot of stocks, sometimes you come across people with 30 or 50[or many more] stocks in one account, if they're going to sell that, sometimes the old broker is going to charge a kind of high fee to sell those stocks. That can generate a lot of cost for you that again, you're on your way out the door, it doesn't feel good, and you just don't want to pay that money. So, a way around that, again, is if you transfer those assets in kind, your new advisor can potentially sell those investments, possibly without any commission or maybe with much lower commissions, so talk about that and look into that before you make a decision to do anything. Next, we have your time, and it certainly does take time to do all this. You have to do agreements and you have to gather information and fill out forms, and what I'd say about that is that we try to make it as easy as possible for you, but you do have to do a couple of things, so ideally, you get this right and you work with the right. Advisor, who you can have a long term relationship with. This isn't something that you're going to do every year or every couple of years. Hopefully, it's many years or many decades[or the rest of your life] that you end up working with your new advisor. Then, there are a couple of other things and little fees that just might hit your accounts. There are transfer out fees that might be $50 or $100 or more, you might be paying IRA custodial fees, all of those things can just kind of ding you and they don't feel good. But again, we're hopefully not going to do this very often in your life, so that in the big picture, hopefully it's not going to affect you significantly. If we look closer at this "in kind" transfer, there are a couple of good reasons to do this. One is again, it can manage those taxes, so that way you're not selling everything at once. You might need to sell eventually, perhaps that's part of the reason you're changing advisors, but your new advisor can maybe pick when to do that or work around certain positions at least temporarily, so that you don't get a big huge tax hit in one year. The. Other reason is, again, it can manage those fees on commissions. And a third reason that wasn't listed before is that it keeps you in the market. If you have investments that you're going to sell and convert to cash before you transfer to a new advisor, you might be out of the market, and that's a good thing if the market goes down. But if the market is going up, like we hope it does most of the time, then being out of the markets for a while can penalize you. That's one more reason to look at these "in kind" transfers. So how do you change? Just to quickly breeze through these: Make sure you get the right advisor next. So ask a lot of questions and have conversations to make sure it's a good fit. You also want to review your agreements with your existing service providers, your advisor, whatever brokerage or insurance providers you're using. You want to understand what exactly the cost might be, what commitments you might have made so that there are no surprises. Then, you engage with the new advisor. That's a little bit of paperwork, hopefully it's easy, maybe some e signatures to open up accounts. Then, you're going to provide statement copies and other information. If you're transferring accounts in particular. This helps to make that all happen. You don't have to do everything alone! You can lean on your new advisor, they can do conference calls with you and help you speak the language so that you get all of this done efficiently and effectively. And then when you submit a transfer request, in many cases, you're done. Everything happens behind the scenes. You just give some paperwork or an electronic signature to your new advisor, and things start happening for you. Before you close your old accounts, it's often a good idea to gather information. Get those old historic statements and maybe your tax documents, any other information that you might want to have on file just before you close that account, and it gets more difficult to get that information. So when is it time to move on? If you're asking that question, maybe it's time. A lot of times, it's lack of trust. Whatever it might be, maybe you've worked with somebody for a number of years, they've done good things for you, but just something changed, and if trust gets ruined, it's often hard to get back and you just might be uncomfortable, so if that's the case, you can consider moving. Same goes for the wrong vibe. If you're just not connecting and communicating, this is somebody who you are trusting with something very important, and they need to also understand you, so if that's not happening. You can move on. Some advisors only talk about investments or manage investments, and that's okay, but if you want more than that, maybe you want somebody to help you with retirement income planning or figuring out what to do with your mortgage. Then, maybe you need an advisor who can have those discussions with you. Then, there are sometimes advisors who are just charging high fees. If you're not getting value for the fees you're paying, it's definitely worth shopping around and figuring out what else is out there. Some advisors are unresponsive, it's kind of surprising, but I guess they don't return phone calls or emails for some reason, and if that's happening, then it's definitely a good reason to move on. And then some advisors may be taking risks that you think are unreasonable, and if you're in that situation, definitely a good first step is to talk with your advisor and make sure that they understand what you want to do with your money. But again, if that breaks your trust or if they're not following your instructions, then you need to move on and get your risk more in line with what's right for you. I hope this information has been helpful. Again, the idea is to manage those costs and be aware of some of the surprises that might pop up as you go through this process, and just to make it as easy as possible to get with a new advisor who can be a long term resource for you. Please subscribe to this channel. It does not cost you anything to do that, and it lets you know when new videos like this come out. Plus, it helps me out a tiny bit, so thank you, and thanks to everybody who's already subscribed!