Following Your Adviser

If your financial adviser jumps ship, should you follow suit?

Some advisers leave large firms for smaller boutique firms to broaden the products they're allowed to work with or to start their own firm. In other cases, advisers move because of a reorganization or a firm's poor performance.

As an investor, you need to determine if it's in your best interest to remain at a firm with a new adviser or to follow your current adviser to his or her new location.

First, find out why the adviser left. Contact whomever communicated the change and, if you prefer, ask for a face-to-face meeting. Ask if there has been a lot of turnover or if there are any major changes in the business that would cause your adviser to leave.

Red flags should also rise if you get answers such as "You don't need to be worried about it because we have other people who are just as good" or "We'll take care of you" without additional information.

If the credibility or future of the firm isn't in question, you'll then need to ask yourself: How will a new adviser meet my needs and expectations? How will the change affect my portfolio? Can I choose my new adviser? Will a new firm be a good fit?

If you want to follow your adviser, you may have to reach out since some advisers are bound by rules that limit them from soliciting former clients.

Source:  Emily Glazer, Wall Street Journal

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

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