A question for retirees getting help with their investments and financial planning: How old is your adviser?
A stealth problem in investment advice is having a trusted adviser who retires. What next? A 67-year-old reader of the Carrick on Money newsletter recently asked this exact question. Her bank-based adviser just announced her retirement in a note that also said the bank is “working hard” on a transition to a new planner in the organization.
This is bad news because this reader likes her adviser and feels they understand each other, particularly on the matter of risk. Should this client wait it out to see who her bank assigns her account to, or go with a nice young adviser her partner has found at his bank?
Before looking at an answer to this question, let’s get pro-active for a moment. If you have an adviser who is in their late 50s or 60s, ask about their retirement plans. Find out exactly what would happen with your account on your adviser’s retirement. In cases where retirement is imminent, ask who your account would be transferred to. Maybe you can meet this person in advance.
Retirees need to be especially vigilant about retiring advisers. Advisory relationships with retirees are deeper. Advisers are essentially managing a lifetime’s savings and turning them into sustainable income. They should be advising not just on investments, but on tax, estate planning, insurance and more. Also, aging clients may rely more on advisers as their cognitive skills diminish.
How a retiring adviser and his or her company handles your account is a signal of how much you’re valued as a client. An orderly transition to a qualified person who reaches out to you in some form is ideal. Having a period of time where you don’t know who your adviser is a bad sign.
When/if you do get assigned a new person, try to meet them in person or in a video call. See if they’ve taken the time to find out about your account, and what they have to offer.
As for the reader who is losing her adviser to retirement, I suggest she give the bank some time to assign someone and then have a meeting with that person. If the bank doesn’t deliver, then it’s time to meet the guy at her partner’s bank. Maybe he can do better.