10 Signs It May Be Time to Switch Financial Advisors

Speaker 1 – 00:00
There’s a lot of professionals in our field. Some of them are good, some of them are okay, and some of them are
not so good, in our opinion. And we’re going to run through just 10 signs that you should switch financial advisors
or consider making a switch.
Speaker 2 – 00:11
If you start going through these and you’re nodding your head yes to three or more, you should probably have a
conversation.
Speaker 1 – 00:16
If you’re working with an advisor that is just managing an account for you that has no eyes on your tax return, that’s
a huge red flag.
Speaker 2 – 00:24
If your financial advisor can’t explain their fee structure or how they’re paid in one sentence, that’s a big red flag.
Speaker 1 – 00:30
If you don’t have a idea of what your financial plan is, that tells me that there might be an issue.
Speaker 2 – 00:35
If you go to your next advisor and it’s just a balance sheet and there’s no real plan or ideas behind the balance
sheet, it’s probably a red flag.
Speaker 1 – 00:41
If your advisor is not helping you with that might be a sign that they’re just kind of managing your investments or
doing your insurance.
Speaker 2 – 00:47
If you wouldn’t recommend your best friend, your wife, your husband, your closest colleague to an advisor, maybe
time to consider a new.
Speaker 1 – 00:57
So, Tyler, there are a lot of financial advisors out there. There’s financial representatives, there’s wealth advisors. I
believe we’re wealth strategists, there’s financial advisors. There’s a lot of letters you can put after your name.
There’s a lot of professionals in our field, and some of them are good, some of them are okay, and some of them
are not so good in our opinion. And so in this podcast, we’re going to run through just 10 signs that you should
switch financial advisors or consider making a switch. And we’re going to walk through everything from
transparency around fees, transparency around performance, building a team around you. There’s, there’s a lot of
things that you should be looking for in a financial advisory team and things that, that might be a red flag. So, Tyler,
why don’t you start us off and go through number one?
Speaker 2 – 01:39
Yeah. Thanks, Ben. Just for the audience, if you start going through these and you’re nodding your head yes to
three or more, you should probably have a conversation. Just something to keep in mind as we’re going through
these sign number one, if your financial advisor can’t explain their fee structure or how they’re paid in one
sentence, that’s a big red flag. If they are stuttering over their Words, or it’s an asset fee with some commissions
and fund. If they start just like splurring words at you and it doesn’t make sense, or they don’t seem like they know
how to explain it’s impossible for them to explain it to you in a proper way if they don’t understand it themselves.
That’s number one what I would do. And I’ve even seen like some of the advisors here do it in meetings.
Speaker 2 – 02:21
Like it should be written down. It should be very clear, like, hey, our asset fee for you is blank dollar amount you’re
charging X fee. Here are the fund expense ratios. I think anything beyond that, or if they’re not being very clear,
they’re being dodgy with their answers, I think are all pretty big red flags, at least in my opinion.
Speaker 1 – 02:42
There’s three ways advisors or advisory firms get paid. The first one is commissions. If you work with an ria, there
shouldn’t be any commissions. There’s the soft cost or the cost of the funds that you might be invested in your
investment account or in your IRA or Roth ira. Those, you should know what that percentage is, depending on what
account you’re in. And then the third way is an advisory fee. How is your advisor getting paid? Are you paying them
a flat fee? Are they taking a percentage of the assets that they manage for you or what services are they providing?
All of that, you should have a pretty clear understanding of that. And if not, that should be pretty well listed in your
investment management agreement. And that’s something that you should have on file and have a pretty clear
understanding over.
Speaker 1 – 03:22
The second sign is if they never ask or review your tax return. This is something that every advisor should be
looking at for their clients. Because a tax return really should tell the advisor everything that they need to know
about the client. Gives them a really good sense of what their income is, what their deductions look like, how
charitable they are, what opportunities might exist. If there’s any real estate activity. I mean, so there’s a million
things that can be learned from a client’s tax return. And if you’re working with an advisor that is just managing an
account for you that has no eyes on your tax return, that’s a huge red flag, at least for me. Especially if you’re
looking at something like an investment account or a brokerage account where there are pretty significant tax loss
harvesting opportunities available.
Speaker 1 – 04:14
And if that is not getting reflected on your tax return, it’s as if it’s not happening. And so having an Advisor or a
team that is understanding what is going on in your tax return is super important.
Speaker 2 – 04:24
Yeah, man, that’s a good point. I always like to use this analogy. If your surgeon ever walked in and didn’t ask you
any questions and said, hey, I think you need a heart transplant, you should probably run away from that doctor. It’s
the same. If a financial advisor isn’t going to look at your tax return, you should probably run away.
Speaker 1 – 04:38
Yeah. Even something as simple as if you’re an advisor and you’re recommending a Roth conversion for a client, a
tax return will tell you exactly what their income is looking like. So you can really dial in a Runway that makes
sense for the client if you want to avoid creeping into the 32, 35, 37% bracket. And so if you’re doing a Roth
conversion, you don’t know what the client’s actual income is or if you didn’t reference the tax return, that. That’s
tough. I don’t.
Speaker 2 – 05:03
It’s hard to base a recommendation off something that you don’t have visibility into.
Speaker 1 – 05:06
Yeah, I don’t think that is something that advisors should be doing. So the third thing is they only call when they
need something, or they only call when they want to meet and not necessarily when you want to meet. And so a lot
of advisors will feel like they’re calling you almost like because something’s on sale or there’s like a, you know, a
limited time kind of alternative. Your advisors should be the opposite of that. They should be proactive, reaching
out to you before there are these almost like rushed needs for meetings, whether that’s to plan out a tax projection
for the year in a proactive basis, checking in on your estate, planning your life and disability insurance like that.
Speaker 1 – 05:44
Proactive review before things are going bad versus a call to almost like sell a product or sell a fund or tell you
need to be in this fund versus that fund. If 100% of the outreach that you’re getting from your advisor is driven by a
product or a fund and it’s not proactive, then. Then I’m not sure what type of relationship you’re really. You’re really
in.
Speaker 2 – 06:03
Right? Yeah, that’s a good point. Number four, if there’s no coordination with a CPA or attorney. You know, most
financial advisors, I don’t want to speak for all, but most, they really try to. They work in one silo. Right. They might
use the term, I’ll manage your investments. I’ll help you with your Roth conversions. Ben brought this up. Earlier, if
they’re not looking at your tax return, they’re not doing a budget or going through your cash flow with you. They’re
really just operating in a single silo. It’s really, at least in our opinion, that’s why we have CPAs in house. Like, you
really need all three of these silos talking. And if they’re not, there’s probably something getting missed. Another
point would be like, I don’t know how often, like, a client’s like, can you get on my call with my cpa?
Speaker 2 – 06:42
And like, if you’re not, or they’re not joining the call, or it feels like there’s a gap in communication, like, you really
should try to tie that down, at least in my opinion.
Speaker 1 – 06:52
One thing I’d add to this is where I’ve seen this go bad is your advisor meets with the client, provides
recommendations, and the client runs it by their cpa. They agree with some of it. They disagree with other parts of
it. And then we meet with the CPA and the client. You know, a separate meeting from the meeting that we just had
to talk through everything. Then the attorney reviews it. He or she has some questions and clarifications. Now
we’re all getting on a meeting with the attorney. And it’s like, that was four meetings that just happened.
Speaker 2 – 07:21
When.
Speaker 1 – 07:21
If you’re working with a team that kind of has all this coordinated in one house, that could have been one meeting.
And so making sure that you’re not only just coordination with the cpa, the attorney, but that they’re all on the same
page and they’re all giving you advice, that everyone’s kind of riding on the same ship. Too often I feel like
professionals just want to feel like their opinion of what is best for the client might just differ from what someone
else’s professional opinion is for what’s best for the client. And that no one’s really right or wrong in that scenario,
but you’re not. You’re putting the client in a position where they need to make a decision, where they should be
feeling like, hey, like, you guys are in my corner, like, what. What should I be doing?
Speaker 1 – 08:00
And, you know, sometimes the confliction there can be causing more. More harm than good.
Speaker 2 – 08:05
And then you look up, you have six meetings and nothing got.
Speaker 1 – 08:07
Nothing got done. Why are we paying for all of these services when we just. Nothing. Nothing even happened. So
the next point is, if you don’t have like a. A clear idea of what your financial plan is, that tells me that there might be
an issue if you Just have almost like a quarterly investment review where you talk about the market and you get a
quarterly statement or a semi annual statement and you kind of go on your merry way. In my opinion, you have an
investment manager which if that’s what you’re looking for, that’s totally fine. But if you’re looking for a financial
advisor or a financial planner, you should have an idea of what your financial plan is. You should know what you
know. How am I on track for retirement? What can I realistically spend?
Speaker 1 – 08:49
Understanding why I’m doing the things I’m doing now that’ll set me up for that. Whether that’s education funding,
proactive tax planning, estate planning strategies, you should have an idea of why you’re doing all that in
coordination with one financial plan. So if you had to like if you met with a new advisor tomorrow and they asked
like, what’s your financial plan look like? Is it just like a insurance policy, is it investment account, what are you
handing them? Or like what are you telling them? And if it’s just one of those two things, you have a product or an
account, which is fine, that’s part of the plan. But you might not have a plan, right?
Speaker 2 – 09:24
Yeah. Ben, you bring up a good point. If you go to your next advisor and it’s just a balance sheet and there’s no real
plan or ideas behind the balance sheet, it’s probably a red flag. Number six, if your advisor seems to be a generalist
and there’s no niche planning going on. And by niche planning I mean like a lot of our clients are physicians. If
you’re with an advisor, have an advisor that’s not going through your contract with you. They don’t necessarily have
to pull the MGMA data, but have access to it and kind of be knowledgeable of what’s going on in your field. They’re
not looking at your equity comp or any exit planning. If you’re a business owner, if you’re not having those
conversations, it’s you’re more like you’re meeting with someone that’s just really.
Speaker 2 – 10:01
You could sell table stakes now, in my opinion, you could pull up your AI chat bot and get to where you need to be.
It’s kind of all, like I said, it’s table stakes. You’re just doing the investment management. A good question. I’ve had
clients ask us this and it’s always like a good discussion point. Like I would ask what percentage of their
investment or advising like book of business is like you, whether that’s Like a resident going to a physician or a
business owner, if it’s really just like a grab bag of like random, I don’t want to call it random, but 10% business
owners, 10%, like their buddies from college, 10% guys they sold an insurance policy to, or ladies they sold an
insurance policy to, they probably don’t have a good thought process or idea around your specific planning needs.
Speaker 2 – 10:46
So that’s something I would keep in mind if you don’t feel like you’re.
Speaker 1 – 10:48
Getting the value from your advisor, if they’re not doing these things for you. I mean, I would have a direct
conversation with them and ask them, are these things that you can help me with or is this within the realm of your
services? You know, as part of our advisory fee at ewa, we would ask for direct feedback right away. I mean, we
believe that the fee that we charge, we provide the value that is 3x the fee. And if you’re not feeling that way as a
client, we would ask for direct feedback right away and address it.
Speaker 1 – 11:18
And so if there are items in your financial plan that you are not bringing up with your advisor because you don’t
think that they are an expert at it, or if you don’t think they can handle it, well, those are things that you should be
discussing with them or at the very least looking for a team that can help you with these things. So a lot of our
clients, again you mentioned physician contracts, student loans, understanding their business structure, I mean,
those are things that don’t show up on an account statement and those are things that are keeping clients up at
night or people up at night if they don’t have the right plan in place for those specific items or articles of their plan.
Speaker 1 – 11:54
So if you don’t have an advisor that’s addressing those things, it could be assigned to find someone that will. So
the next point, should I be working with this person or team or not? Is if they can’t clearly answer if they’re a
fiduciary or not. And so if you work with an independent RIA that is fee only, they will be fiduciaries. And that’s a
very easy yes. If you’re working with someone that is either fee based or works, you know, for commissions, and
you ask if they’re a fiduciary and there is a convoluted answer that they have fiduciary duty or that the time that
they meet with you is a fairly simple question, yes or no. And so if you’re getting a, a complicated answer to that
then they may not be true fiduciaries in the true sense of the word.
Speaker 1 – 12:38
So getting a clear picture of if your advisor is a true fiduciary is very important.
Speaker 2 – 12:43
Number eight, performance is the only thing discussed. This is probably my favorite one to talk about meeting with
your advisor. If you’re going through your financial plan and if the first 25 to 30 minutes of the conversation are a
breakdown of how your real estate fund or bond fund or whatever, insurance policy, whatever it may be, how it
performed over the past six months, I would run so far away. I said it earlier. It’s table stakes, right? You could
probably build your Claude bot or your ChatGPT bot and be like, hey, how do I want to manage these assets? Like,
what would you do if you were me with these goals? I think there’s a lot more value to be had than just investment
management at this point. I’m sure Ben would agree. Everybody at EWA would agree.
Speaker 1 – 13:25
Yeah, I mean, just to piggyback off that, I mean, oftentimes I’ll sit down with the clients and they’ll say, hey, I don’t, I
mean, I don’t need to know every last detail about what fund I’m in. Like, that’s why I’m working with you guys.
Because we want to keep our client meetings to the things that are most important in our clients lives. And very
rarely is it am I in this ETF versus this mutual fund. And hey, is this stock going to blow up? You know, it’s rarely do
the conversations go to that level. And I’m not saying it’s not important, but a lot of times our clients are asking
about their financial plan, their budget, their cash flow, how are they tracking and those. The performance comes
up in that.
Speaker 1 – 14:09
But it is not a 30 minute, here’s why I’m in this fund and here are the companies that make up this fund. It. I almost
feel like that can be a waste of time in certain aspects. And so if all you’re getting is performance and all you’re
getting is a quarterly statement, it’s again, it, I’m not saying it’s not important. You know, no advisory firm would be
in business if they didn’t get good returns for their clients or market like returns for their clients, I should say. But if
that’s the only thing mentioned again, you might have an investment manager, an account, but you might not have
a financial plan.
Speaker 1 – 14:43
And if that’s what you’re looking for, is something to think about the next thing, and this is, I think, getting more and
more relevant is if you feel like you’re getting talked at or lectured and not worked with or talked with, I think that
can be a huge red flag. I’ve met with and I’ve. I’ve been to advisory conventions and met with advisors across the
world. And a lot of advisors like to hear themselves talk. They think they’re very smart and intelligent. They’re
always looking for new ways to explain things. And I found that the best advisors that I’ve met are very good at
making complicated topics feel very simple and easy to understand. And so if you don’t understand your advisor or
if they’re using terms that you don’t know what they mean, I think that’s a huge red flag.
Speaker 1 – 15:34
I would never invest in something if I didn’t understand it. If I were in the client’s shoes and you’re telling me about
this complicated thing and you’re not making it so that I can understand it, I would probably not move forward. And
it can be the same way if your advisor is, you know, talking the entire meeting and not letting you dictate the
agenda. I think that can be. That could be a huge red flag. Yeah.
Speaker 2 – 15:57
Ben, like, how many meetings have we sat on where, like, our. Before you even get anything, it’s like, is there
anything you guys want to cover today? Like, so at the end of the day, that’s the most important thing to discuss is
what. What do you guys have questions on or want to spend our time today with? Number 10? They resist a
second opinion. This is a big one. If your advisor is dismissive, feels defensive when presenting recommendations,
or when you mention, like, hey, I want another set of eyes on this. Like, do you mind if I bring another colleague?
Financial professional, attorney, cpa? They’re almost like, I don’t want to call it combative because I. I doubt they’re
going to be combative with you. But if they’re like, nah, I really don’t think you should, it’s probably a red flag.
Speaker 2 – 16:34
It’s probably not getting the best advice out of them. At the end of the day, like, the confidence in your plan should
welcome scrutiny. Like, your advisor should feel comfortable you taking it to a CPA and your CPA going, oh, this is
for. This is really good work. This is really well thought out. Maybe here’s what I would do differently, but I would
think most professionals would be able to admire and acknowledge good work.
Speaker 1 – 16:53
Yeah. If you’re doing what’s in the client’s Best interest, you shouldn’t feel embarrassed or defensive or dismissive
about sharing their plan with one of their other professionals in their life. So if your advisor is hesitant to do that or
doesn’t welcome that with open arms, I think that would be a red flag or a bumpy point to address A couple other
things that I just, I didn’t necessarily make the top 10 list, but I just wanted to add if your advisor has the answer to
everything immediately that can almost be a red flag. I’ve, I get asked questions all the time and I say, hey, I, I, I
don’t know, like, let me get back to you on that. I will find out and get back to you. But if your advisor always has
answer to everything, that can be a red flag.
Speaker 1 – 17:39
Like just be aware that like they may be, they might be giving you the run around. I mean, if they don’t know the, like
I’ve met with some of the best advisors in the country and like, they don’t know things. No one knows everything.
So if your advisor feels like they know everything, I would be wary. And then the second thing is if they’ve just, if
they’re not keeping up with what is going on legislatively or any new bills that have passed that would impact the
tax code, impact how your insurance is structured, just like if you’ve got, you know, it’s really important to be
proactive with that stuff. If you’ve been working with an advisor for a long time that just doesn’t abide it, doesn’t
care about that stuff or doesn’t keep up with it, you could be missing out on some opportunities.
Speaker 2 – 18:26
Yeah, Ben, Couple others here. These are probably smaller in nature, but if your advisor’s never talking about Roth
conversions or backdoor Roths or mega backdoor Roths, if you have that through your employer, it’s probably a
sign that you might want a second opinion on something. Everyone has their opinions about Roth, but at the end of
the day, can beneficial for a lot of clients that are high income earners.
Speaker 1 – 18:45
If your advisor doesn’t even know if your plan allows for it or not, regardless of if you’re, if you should be doing it or
not, your advisor should be reviewing your 401k document and your benefits and they should know whether or not
your plan even supports something like a mega backdoor Roth or if that even makes sense for you. So I, yeah,
agreed, Tyler. And even regardless of if you implement it or not, your advisor should know if your plan allows it.
Yep. As we wrap this up, we’ve kind of hit on a lot of this in the what you shouldn’t be looking for an advisor. But
just briefly, what you should be looking for if they are proactive, if they’re reaching out, when you don’t even ask
them to reach out to schedule some time.
Speaker 1 – 19:23
If you have a coordinated financial plan that you can understand and you can explain to your spouse, you can
explain to your neighbor, you can, if they ask you about it, you can kind of understand what you’re doing and why
you’re doing it, I think that is a sign that you’re working with a really good financial advisor. And if you have an
advisor that is helping you with things that they are not taking a fee on. So, like, you know, advisors get paid to
manage your investments and to handle your insurance, sometimes handle your estate, your tax, things like that.
Speaker 1 – 19:55
But if they’re helping you with making sure you’re in the right student loan repayment plan, if they’re helping you
negotiate your contract so that you are getting paid a fair amount for your services, if you’re a physician based on
your workload, if they are helping you structure your business so that when you eventually sell it, you’re doing it in
the right way, you know, those are things that aren’t going to show up on advisory, you know, an advisory fee, but
those are things that are probably keeping you up at night if you’re dealing with it. And if your advisor is not helping
you with that might be a sign that they’re just kind of managing your investments or doing your insurance.
Speaker 2 – 20:30
I was thinking about it, like, if you wouldn’t recommend your best friend, your wife, your husband, your closest
colleague to an advisor, it may be time to consider a new one.
Speaker 1 – 20:39
If any of these conversations were relevant to you in terms of how your advisor works with you, and you wanted a
second opinion on your financial plan, feel free to reach out. We’re happy to set up a consultation.