How to dump your big-bank financial advisor
Yes, breaking up is hard to do. I know. I’ve been dumped and have done the dumping myself. The fallout is never easy. Oh, I guess the same goes with my big-bank financial advisor as well. I used to have one, many years ago. Those days are over and I’m glad I did it.
If you’re considering breaking up with your big-bank financial advisor you’ve come to the right place to get started.
Step # 1 – It’s Not You It’s Me (Or Maybe It Is You)
Having an experienced financial advisor is a definitely asset, as long as they are providing value. If however, they are nowhere to be seen or heard from for years on end I’m not convinced that’s value added. In my opinion, value for services comes from making a difference, services that stand out from others:
- What services are they offering you cannot do yourself?
- What do they specialize in? Financial advice or just a few biased financial products?
- What expertise do they provide you cannot acquire yourself?
- What makes them different (from other advisors), friends or family members with similar expertise?
If you’re struggling to answer these questions about your financial advisor, something might be wrong with the relationship. Also, consider answering the following questions about you as well:
- What financial decisions do I make myself?
- What financial decisions do I struggle with?
I think the key to getting help in life, financial advice included, is to understand you. The more you understand who you are and what you are/are not capable of, the better you can define your needs.
Step # 2 – I Have Needs Don’t You Know
So, maybe by answering the questions above, you’ve determined you should spend less than you make and having some money invested for your financial future is probably a good thing. With that in mind, consider writing down a few financial goals by answering questions like:
- What are my savings goals? What am I saving for now?
- What are my investing goals? How are those investments performing?
- When would I like to pay off my mortgage?
- Do I need to save for my kid’s education?
- What other financial obligations do I have? What keeps me up at night?
Understanding what you have, where you are and what you might need is a personal exercise only you can account for. It is also a HUGE part of figuring out where you have to go for help. Take some time to do a self-assessment. I encourage you to inventory the assets and liabilities around you. You might be surprised to find out you know much more about your personal finances than you think.
Step # 3 – I Need My Space (See Ya)
At this point you’ve figured out who you are, where you are and little bit about what you need. Now, it’s time to put together a plan with much more focus on you. Here are some financial facts to get your started on your new financial plan:
Fact: Did you know that mutual funds in Canada are some of the most expensive fund products in the world?
Fact: Did you know you can invest in Exchange Traded Funds (ETFs) for fractions of the cost (of Canadian mutual funds)?
Fact: Did you know that Tax Free Savings Accounts can be much more than a cash savings account?
Fact: Did you know that every lump sum mortgage payment you make can reduce your mortgage principal?
This blog, many other blogs and some great financial forums exist to help you learn more about the alternative products and combinations of financial solutions and strategies available to you, if that is, you want to make time to check them out. The best part is, in most cases this information is FREE. There are no money management fees or debts to be paid, at least on my site. Kidding aside, you can make the leap from your big-bank financial advisor to do-it-yourselfer (DIYer) or work with another financial advisor if you need to, now that you’re armed with some new focused needs. It will take courage to break your financial advisor’s heart but it might be the best thing you’ll ever do for yours.
I recognize the thought of leaving your trusted big-bank financial advisor might be challenging and downright scary. You’ve dealt with them for so long and they know you by middle name and even your dog’s name too. The thing is folks: you can find better help because thousands of investors have done it before you, either on their own or with a fee-only advisor. This is why I’m not suggesting you avoid financial advisors all together – there are many great fee-only specialists that can tailor a financial plan for you by answering many of my questions above and much more. I bet these fee-only advisors will even book performance review meetings with you regularly and they won’t break dates because their focus is on you not financial products.
What I am recommending today is this: if you haven’t heard from your advisor for a very long time then take action. Every relationship – even a financial one – needs attention.
Got a story to share about breaking up with a financial advisor? I’d like to hear it.
Image courtesy: Forbes.