It can feel hard - scary even - to think about leaving your current advisor.

You may have a long standing relationship with your advisor that makes you feel loyal to them. Your family may still work with them, which can bring up difficult family conversations. Yet, despite your history with the advisor, you've decided that you need to find someone new, perhaps an advisor who understands your desire to align your investments with the things that are important to you.  

Yet, despite how it sometimes feels, the process of leaving an advisor is relatively straight forward. Before be find a new advisor, they will help you with the process and walk you through it. The hardest part may be mentally prepared for a possible “retention pitch” when you let them know. But if you’re committed to having your assets invested in alignment with your values, and your existing advisor is not meeting this need, stick with your decision and follow these steps!

Before leaving your current advisor, find a new one. If you don't know how to get started, ValuesAdvisor is a great place to start and has a blog post on how to find one that can help you meet both your values and your financial goals. 

STEP ONE: Set up a call with your new advisor
Set up a call with your new advisor to specifically discuss how to transfer your account to them.

Questions: 

• What are the exact steps you need to take to move your account to them? Are there forms you need to fill out?
  Your new advisor will help you navigate the paperwork of moving your assets from the old firm and transferring them to a new one, and will let you know of any tax consequences, if any.
  
  
• What information do they need from you - either provided by you or your existing advisor? What documents do they need copies of? I.e statements, review presentations, online transaction records, contracts, and the cost bases of all securities.
  If you don't have copies of the documents your new advisor needs, you often can find them online or can get copies from your existing advisor.

• Inform them you are leaving. If you feel comfortable, you can tell them why (A few ideas: "I am choosing a new advisor for the next chapter of my life;" "I am seeking an advisor who has a history of impact investing expertise", "I am moving to a new advisor whose approach fits my needs and can execute the investment philosophy I want going forward."  If you don't feel comfortable, you don't have to share why you are leaving. 
  
  Thank them for, their guidance, and assistance.
  Resist the urge to say you’re sorry. There is no reason to apologize. 
• Ask them if there are any specific actions you need to take to release your account to the new advisor (are there any non-transferable funds, lines of credit, or anything else that may hold up the transfer of assets). If you don't have copies of your statements, or other information the new advisor needs, ask the advisor to provide it. Federal regulation requires that your current advisor transfer the historical account records and transaction history to your new advisor.
• Ask them whether there are costs associated with moving assets, which can include closing-account fees, exit fees from certain funds, commissions for selling investments that can't be transferred (and any losses).

STEP THREE: Follow up in writing
Follow up your verbal conversation to your existing advisor with a written notice of your intent to leave soon after your call with them, either via email or a physical letter. This will serve as a formal record of your decision and provide clarity on the next steps.

STEP FOUR: Stay in contact with your new advisor
Your new advisor will  hold your hand as much as you need during the transition process and walk you through it. If they're not available directly, they should have members on their team always available to answer questions. Remember that they have done this many times and they know exactly how to transfer your account.

If you'd like to ensure you're informed, ask that you be copied on all correspondence between your old and newadvisor

The mechanics of moving assets from one advisor to another

You may be curious to learn more about the technical side of transferring your account from one firm to another. Below are a few common ways. Be sure to ask your new advisor if you'd like to learn more. 

• In-kind transfers move all investments held by a major custodian such as Fidelity or Charles Schwab, to your new custodian or account. Most custodians use the ACAT (Automated Customer Account Transfer Service) system which moves assets electronically with negligible fees. The transfer only requires a simple authorization (signature) prepared for you, by your new advisor. 
• Some bank transfers cannot be completed through the electronic ACAT system and will need to be delivered out by the terminated advisor’s custodian to your new account.
• For privately held assets, like private funds, that you want your new advisor to provide custodianship for, the new advisor will reach out to the fund to find out what is needed to facilitate a private fund transfer.    
• Your new advisor will determine how/if assets exclusive to your former advisor's firm can be transferred. If they need to be  liquidated, they will take current markets and tax consequences into consideration.

Typical forms used:

1. ACAT form: This is a form used to transfer assets between brokerage firms. The form includes information on the account(s) to be transferred, the receiving firm, and any other relevant details. The transferring firm typically initiates this process. Your new advisor will give you this form to sign, after which the advisor’s custodian will send it to the terminated advisor’s custodian for processing. 
2. IRA transfer form: If the account being transferred is an individual retirement account (IRA), this form specifies the IRA account details and the receiving IRA custodian.
3. Stock certificates: If you hold physical stock certificates, they may need to be transferred to the new advisory firm.
4. Annuity transfer form: An annuity transfer form transfers an annuity contract to the new advisor.

Additional Optional Steps:

Seek outside guidance. If your finances are particular complex, or you feel nervous about signing a new advisor's contracts, you can review with an accountant or attorney.

Additional resource:

Podcast “How to break up with your Financial Advisor” 

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