financial advisor notified me of a change of companies?

[elizabethdmd]

So I wrote an email to my financial advisor at Larson Financial Group (a white coat investor approved firm) and I got a terrifying email that "Andy is no longer affiliated with Larson Financial Group, if you need more info please contact yada yada.."

Of course I panicked thinking what happened to my advisor? my money?

Turns out the advisor broke off from the firm and started his own firm with their clients. Is this normal? It is making me nervous. I want to take my money and put it under my mattress! (haha!)  I know this blog is supposed to inspire us to do our own investing, but I loathe it. I'd rather study things in my field than do investing myself.

Here's the email he sent me explaining things, please let me know if this sounds ok (and why can't financial advisors be held to the strict "do no harm" standards that we in the medical/dental profession are? it's not fair!)

[Contents of email removed at the request of one of the parties in the email conversation. I sent poster an email. - WCI]

 

I'd love your feedback!

Thank you!

Elizabeth

[The White Coat Investor]

I've heard a few rumors about some changes there, but I have little more information than you do.

I certainly wouldn't worry about your money disappearing. Like most advisory firms, neither Larson nor Loring Ward actually hold your money. Now if TD Ameritrade goes under...

If you feel like you'e getting good advice at a fair price from your advisor, I wouldn't worry about staying with him/her.

[VagabondMD]

It’s very unprofessional to not notify the clients before the transition has occurred and not offer them the opportunity to stay with “Larson”, especially if that is where the relationship began. For that reason alone, I would probably leave the advisor.

Either way, I would not worry about the location of your assets, and you can move them whenever you like.

[u500_insulin]

I was never impressed with Larson Financial Group. I had them in fellowship, dropped them right before I left.

They do not manage the details.

 

[elizabethdmd]

The financial advisor did indeed mention some sort of a "change" over a previous phone call, he said that there would be a new name but everything would stay the same for us. He was somewhat vague so I just assumed it was a merger.

I was happy in general with things so far, so I will probably stick it out.  I think I was ok with Larson's  management with the "details" because I had pretty much done all the "full picture" work prior to hiring them (I already had a great estate attorney, a great disability plan, good life insurance etc...). But I had noticed that their administrative assistant made a couple typos on a life insurance application (ie, my birthday was incorrect) which made me worry about what other data entry details she messed up.

Thanks for the replies, i'll keep you posted if anything changes!

[djohnflatfeecfp]

Depending on how he is registered he may not be able to let you know he is leaving.  It is part of the broker's protocol.  It typically applies to the wirehouses like Merrill Lynch and UBS.  When I left Merrill years ago I could not tell any clients ahead of time.

 

Regardless as to whether he notified you or not, your accounts are still at Larson and you do not have to follow him to Loring Ward.  You can go with him, stay at Larson where someone else will take over the account (I'm surprised you did not get a call from someone there wanting to keep your account.), take it to a completely new advisor or do it yourself.  The nice thing is if you were considering firing him as your advisor now is a perfect time because you basically have to decide whether you will "rehire" him.

[Prime]

I experienced something similar with Larson recently.  However, when my advisor left he did notify both in writing and by phone which was nice.

It worked out well for us however.  After months of reading this blog and various books on financial planning, I felt empowered enough to do all on our own.  No need for them to manage our retirement funds.

[Hank]

Your accounts won't be moved from Old Company to New Company against your will.  Your advisor is going to send you paperwork for your signature that would authorize the transfer of your account from Old Company to New Company.  (TD Ameritrade is custodian of your funds and might be custodian of your funds if you move to New Company.)

While you loathe the notion of managing your own money, now is a good time to step back and re-evaluate what you're getting out of your relationship with your financial advisor and your advisory firm.  Do you like your financial advisor better than you like his old employer, or do you care more about the old company than your particular advisor?  Is there someone else out there who could meet your needs and do as good of a job or better for the same fees or less per year?  If you're paying 1% asset under management (AUM) fees, have your accounts grown to the point where that's too much money for the service you're getting?  (It doesn't take more effort to manage $5 million than it does to manage $500K.)  Would your spouse or significant other be comfortable and competent managing these investments if you got hit by a bus tomorrow?

Please take the time to calculate just how much you're paying each year to your financial advisor.  How many implants do you need to place and restore and how much do you need to pay in taxes before you can pay what your financial advisor is charging you?  How many sites of molar endo or surgical extractions would it be to pay for this advice in 2018?  How about five or ten years from now when your accounts have grown larger still?

If you have a procedure that nets you $300 in profit, figure that you may pay 50% or more in FICA and state and federal taxes once that pay hits your W-2.  It takes a lot of $150 after taxes procedures to pay for $15K in financial advisor fees every year.  Learning to manage your own investments might be the most profitable thing you can do.  If you still loathe the idea, shop around and make sure you're getting excellent service for your money.  Look at hourly rate financial planners as well.

[elizabethdmd]

Great suggestions from all. I will certainly review things, and I'm feeling much more settled now that i know this is a completely normal business situation.

A lot to think about!

 

 

[childay]

elizabethdmd wrote:

[Contents of email removed at the request of one of the parties in the email conversation. I sent poster an email. – WCI]

Click to expand...

OK.. you might post more of an explanation there WCI.