The Planner's Perspective: Does Your Advisor Have a Plan?

Paul Morrone |

By Paul Morrone CFP®, CPA, MSA

You’ve sat with your advisor dozens of times, hopefully to review your plan and discuss whether you’re still on track to meet your goals. While it’s good to know that he or she is keeping a watchful eye over your portfolio and progress toward your plan benchmarks, there is a bigger picture item that is often unaddressed between advisor and client. One of the questions that you may not have asked (but probably have thought about) is talking to your advisor about what happens to you, your assets and your plan if something happens to them. Depending upon the structure of your advisor’s practice, this question may come with some answers that may be very disheartening.

It’s no secret that just like our clients, advisors do not plan to pass away prematurely or suddenly become disabled. But, also as with our clients, it does happen. Whether it’s a freak accident, a degenerative illness or simply just that person’s time, your advisor is a normal person just like you. While these cases (death and disability) are unlikely to impact your relationship with your advisor, they do happen, and your advisor should be prepared for the worst. Just as an advisor should care about what happens to his/her family in the event that something happens to them, they should also be equally as concerned that their client’s best interests are protected in the future as well.

Unfortunately, it is not just death or disability that you as a client should be concerned about. Advisors also have their own personal financial plan which likely involves retirement at some point in the future. For some this may be years, or even decades, away, and for others you may be wondering why they are even still working and when they are going to pull the plug. No matter the case, it is a major consideration in an aging profession. You have every right to know what the plan is if your advisor is on the way out, and it is a prudent question to ask as their decision to leave the business may materially impact your financial future.

As a client, you should understand the protocol of who to contact if you advisor is no longer able to service your accounts. By now, you are probably thinking the following: Who am I going to call when I have a question? How will I access my funds when need them and my advisor is not there? Who is going to be responsible for managing my assets going forward? Who is the new point of contact for my plan and responsible for keeping me on track?

Just important as understanding the logistics of a transition to a new advisor is understanding ‘who’ the new person really is and how well they are suited to maintain your financial plan and manage your wealth. Have you met them? Do you trust them? Do they have the same licenses or credentials as your existing advisor and can they provide the same level of service? Where are they located? Are they a random person who ‘inherited’ your account, or is it someone your advisor had trusted to service their clients the way they would have? Have you become a ‘house account’ and been assigned to a call center or do you have a specific advisor to contact? Ultimately, after years of building a relationship with you and your family, is your advisor’s firm designed with a succession plan in mind to continue that success?