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Over the years, you’ve grown to trust your financial adviser. But the relationship is starting to fray. As retirement nears, the adviser spends less time in the office. That means you’re often dealing with a junior planner at the firm.
Even if your adviser continues to work full-time, you keep getting directed to an understudy. As your longtime adviser becomes increasingly inaccessible, you wonder whether you’re getting sufficient attention from a seasoned pro.
Should you worry that the relative newcomer will make a mistake? Should you insist on only talking to your trusty veteran adviser? In most cases, the answers are no and no.
As experienced advisers craft a succession plan, they groom younger associates to play a larger role. That’s in your best interest: Assuming you want continuity, you should expect your adviser to create a pipeline of rising hotshots equipped to serve you and your family for decades.
Other advisers are not retiring, but they’re growing a business and can’t clone themselves. So they hire more planners to increase their capacity to handle more accounts.
The challenge for you is weaning yourself from your longtime adviser and bonding with someone new.
The situation is not so different from when a young doctor joins a practice, says Jude Boudreaux, a certified financial planner in New Orleans, La. “They may not have all the polish of your old doctor,” he says, but you’re still benefiting from a knowledgeable expert. It’s the same with older financial advisers, he adds; they bring in fledgling planners who possess strong skills, high energy and a long-term commitment to the business.
“A lot of younger planners have stronger technical backgrounds than we do,” Boudreaux adds. “They have degrees in financial planning that didn’t exist when we started out.”
Ideally, your longtime adviser will pave the way for a smooth transition by communicating early and often with you about what’s going on. That way, you gain peace of mind knowing that you’ll still receive superior service from highly qualified, carefully vetted professionals.
Jason McGarraugh, a Houston-based certified financial planner, says an adviser must answer two questions for the client before a younger planner enters the picture: 1) Why are we doing this? and 2) What’s the new planner’s background?
In 2006, a 69-year-old adviser hired McGarraugh as a junior planner. Over the next decade, they orchestrated a seamless transition. “We worked with every client as a team and told them upfront from day one that this was for succession purposes,” says McGarraugh, now 42. “Not one client batted an eye. I’ve had a 98% retention rate with the original clients.”
McGarraugh says the gradual shift from older to younger planner alleviated an unspoken but ever-present client concern, “Will my adviser retire before I do?”
Of course, some clients resist change of any kind. Tied to their adviser for decades, they may chafe at having to acquaint themselves with someone new. “A few clients will feel better if they’re working with the ‘best’ highest-level adviser,” said Kristin Pugh, an Atlanta-based certified financial planner.
To address such concerns, Pugh suggests that advisers emphasize a firm’s collaborative approach in serving clients. Rather than take credit, a senior adviser should highlight other contributors on the team. Pugh also recommends that junior advisers invite clients to meet them in person. This sets the stage for a stronger, more well-rounded relationship to blossom.
“Clients can see how they feel with the new adviser,” she said. “They can get to know the whole person, to learn about the adviser’s history and see if it lines up with what they want.”
Read: Here’s how over 16,000 financial advisors invested their clients’ money last year
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