Rick Kahler’s Column – Financial Planner Retiring? The team approach facilitates the transition


One of the most common reasons new clients come to me is because of the loss of their long-time financial advisor. It’s not uncommon for someone to be with the same advisor for decades. I have clients who have been with me for over 40 years.

In my experience, the most common reason a person loses a financial advisor is when the advisor is removed from their practice. The death of the advisor follows, a change of company or profession.

Whatever the reason, ending a long-standing relationship with a trusted professional can lead to a disruptive and emotional transition when looking for a new service provider. As with finding a new doctor, accountant, or therapist, you often have to “start from scratch” in your search for a trustworthy replacement.

I wrote about what to look for and watch out for in a counselor. One thing I would add to the list might avoid having to find yourself in this situation again. You may want to consider becoming the client of a team of financial professionals rather than the client of a single advisor.

Just because advisors are associated with a larger business doesn’t mean they are part of a team. Most financial planning firms, like most real estate firms, are “solo” firms. The company provides back office services and training for advisers, but it is the responsibility of each advisor to “build a backlog” of clients. Only this advisor, often with one or two assistants, oversees the advice and service to their clients. If an advisor leaves the broker, their client book is often owned by the company and handed over to a new advisor.

These clients often receive an impersonal mass email informing them that the advisor is no longer with the company and introducing them to their new advisor – usually someone they’ve never met and know nothing about. Such a blunt review can leave customers feeling abandoned, betrayed, anxious, overwhelmed and angry.

Other solo practitioners are independent, paid advisers only. They often start out on their own and add assistants to handle administrative tasks as they grow older. Nonetheless, the emotions and dynamics of the advisor’s retirement, death or disability are the same as if the solo advisor were working for a larger firm.

Depending on the particular situation and their firm’s protocols, some solo advisors may give advance notice of their departure and in some cases may introduce the new advisor to the client. It can go a long way to soften the blow. However, that may not eliminate the need to make a change.

One of the solutions to this downside of having a solo advisor is to hire a company that uses a team approach, known as a “bundle” practice. In some overall practices, there are often two advisors at each client meeting, typically a more experienced senior planner and a less experienced junior planner. In others, planners alternate between clients based on specific client needs. For example, even though all licensed financial planners are generalists, individual CFPs may have a specialty, such as taxes, law, financial therapy, asset protection, etc. These planners can alternate between regular or specially scheduled meetings with the client.

With this team approach, if anyone on the team retires, dies, or leaves the company, there are one or two other planners and support staff, all known to the client, who can comfortably fill the gap. empty.

When the time comes for you to find a new financial advisor, find out if it is a solo or a group business. Learn how they deal with the sudden loss of a counselor before starting a new relationship.

Rick Kahler is President of Kahler Financial Group of Rapid City.


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