Breaking up is hard to do, even when it comes to firing your financial adviser.

Whether it’s a mismatch of investment strategies, a lack of communication or even ethical concerns, the decision to part ways with your financial adviser can be stressful.

In this guide, we’ll walk you through the process of firing your financial adviser step-by-step, along with how to find a new financial adviser who better meets your needs.

1. Review your original contract

Before you initiate the breakup, make sure to revisit the original management contract you signed with your financial adviser.

This document should outline the steps you need to take to formally terminate the relationship, such as providing written notice to your adviser.

You may also need to sign authorization forms and transfer documents, as well as review account closure instructions.

Understand potential fees

Your original contract should also outline any fees or penalties you might encounter when firing your financial adviser.

Some fees and penalties you might encounter include:

Early termination fees: Some advisers may impose penalties for terminating an annual contract early. Others may prorate their annual fee if you terminate the relationship mid-year.

Sales charges: Some mutual funds impose sales charges when you sell shares before a specified time frame.

Account closure fees: Your current adviser may impose a fee for closing your account.

If you hire a new financial adviser, they might offer to reimburse you for all or some of these fees when you transfer your account to their firm. Ask and see if this is an option before making the switch.

2. Decide your next move

After choosing to part ways with your current financial adviser, you’ll need to determine how you’ll manage your finances moving forward.

Here are three options:

Do it yourself: If you choose to take control of your investments, you’ll need to set up new accounts, select investments and monitor your portfolio’s performance. This option gives you complete control but also requires an understanding of the stock market and investment strategies.

Use a robo-adviser: If you’re simply looking for a low-cost way to manage your investments, using a robo-adviser is a good option. Companies like Wealthfront and Betterment use computer algorithms to automate portfolio management at a low cost. However, you’ll miss out on the personalized advice offered by a financial professional.

Hire a new adviser: Opting for a new financial adviser may be a good move if you don’t have the time or energy to independently manage your portfolio. Make sure to find a professional who aligns with your financial goals and investment philosophy by researching and conducting interviews with potential candidates.

3. Request records from your former adviser

If you hire a new financial adviser, they can obtain records from your former adviser on your behalf. It’s a relatively easy, streamlined process.

Your new financial professional will schedule an electronic transfer of your records from your former adviser to ensure a smooth transition, which can take about two weeks to complete.

Just be aware that some assets transfer easier than others. Retirement accounts and tax-deferred accounts transfer easily, for example, but proprietary funds, certain annuities and some other assets unique to a specific investment company may need to be sold or stay behind in an old account.

“Your new adviser will walk you through all of that,” says Charles Sachs, chief investment officer at Kaufman Rossin Wealth in Miami. “Some firms can conduct an analysis of your current portfolio to see if there might be any issues transferring assets ahead of time, then walk you through your options.”

4. Gather your investment records

Before firing your financial adviser, make sure to obtain records of your investments, tax documents and account information. This is especially important if you’re choosing to DIY your investments.

“You can’t go back to your old adviser and say ‘Can I get my 1099 tax form from two years ago?’ if they no longer have access to your account,” says Sachs.

Make sure to also gather your cost basis information, which includes the original purchase price of your investments. You’ll need this when calculating capital gains or losses at tax time.

Signs it might be time to break up with your financial adviser

If you’re considering ditching your financial adviser, you’re not the only one. Here are some red flags that it’s time to move on:

Bad advice leads to poor performance: One of the most glaring signs that it’s time to let go of your financial adviser is poor performance in managing your investments. If you find your portfolio consistently underperforms compared to the market, it’s a red flag.

Communication breakdown: Effective communication is the backbone of any successful adviser-client relationship. If you’re finding it increasingly difficult to get in touch with your adviser, or if they fail to address your concerns in a timely manner, it might be time to move on.

High fees and hidden costs: Another sign of trouble is exorbitant fees that eat into your returns. Advisers should be transparent about their compensation structure. If you notice hidden costs or feel you’re being overcharged, it’s time to reevaluate the relationship.

Mismatched investment philosophy: Your financial adviser should align with your investment goals and risk tolerance. For example, if you’re risk-averse and your adviser is pushing high-risk investments without a clear explanation, you’re likely better off moving on.

How do I fire my financial adviser?

No matter how you choose to part ways with your financial adviser, make sure to keep the interaction professional and respectful.

While an in-person meeting can provide closure, it might not be necessary. An email or phone call can suffice, especially if the relationship has deteriorated. Choose whatever method you’re most comfortable with.

Whether the conversation takes place over email or in person, be polite but get to the point.

“People may be nervous, maybe they’ve worked with that person for 20 years,” says Sachs. “But the thing is this happens all the time. Accounts come in, accounts go out. We understand. Firms want to make the transition as smooth as possible for the client.”

And before you go, ask your current adviser to halt any trading and avoid making changes to your portfolio.

“The last thing you want is for them to buy or sell things inside the account that the new adviser may not want,” says Sachs.

How to find a new financial adviser

When it comes to finding a new financial adviser, research is key. Start by gathering recommendations from friends, family or colleagues who’ve had positive experiences.

Online databases from organizations like the CFP Board and XY Planning Network can also help you find financial advisers in your area and narrow down your options.

Next, interview potential advisers to gauge their investment approach, experience and fee structure. Make sure your communication styles align. Finally, request references and conduct a background check on any potential candidates.

Bottom line

Firing your financial adviser can be uncomfortable, but if you’re not getting the advice you need, ending the relationship is in your best interest. After all, it’s your money and financial future. Just make sure to review your original contract before calling it quits and carefully research new potential advisers before making the switch.

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