Prospective clients often ask me, “What happens to my investment accounts if you die?” It’s a valid question.
Let’s face it, everybody’s gotta go some time, and financial advisors don’t get to cheat death.
I think the question comes from fear primarily. Investors spend time trying to find a trustworthy steward of their hard-earned money. Then spend lots of time meeting with them, and talking with them about very private financial information. It’s natural to have some fear about what would happen next.
The answer is really the same for the early demise of any of your advisors. Whether they are tax preparers, attorneys or financial advisors. It all depends on who and where your money is managed. In the large brokerage firms, accounts would be passed on to one or more of the other advisors. If you use an independent, like me, then you may not have the default new advisor option.
Here are some of your choices if your financial advisor gets hit by a bus:
1. Leave it at the investment firm and accept the new assigned advisor. If you are at a larger investment firm that has multiple advisors, or even in the thousands, then the firm will find you another advisor. The only problem with this is you don’t get any say so in who gets your accounts. It could be a new inexperienced advisor, or it could be an advisor that has too many accounts already. Therefore, you may not get the attention you deserve.
2. Interview multiple advisors at your current investment firm. I think this is a better choice if you are determined to leave your investments at Big Brokerage Firm. Ask for three advisors to interview. That way you can choose between them. With only three, your choice shouldn’t be too daunting. Unless you’re still grieving over your old advisor and the buss incident.
3. Shop around for a new advisor. I think this is the smartest choice. It doesn’t force you to stay with the current firm. It allows you to look at other firms, including the independent financial advisors. You may want to look at advisors credentials as well as experience. Make a list of traits you’d like to see in your new advisor. Perhaps a pulse would be number one?
So those are the choices. If your advisor does die suddenly, first you should remain calm. Most of your investments will not need immediate attention. If your advisor has hired a third party manager for your account, then you should be fine until you get a new advisor. Second, don’t wait. Start looking for poor slob’s replacement right away. Proceed with interviews and your due diligence.
Needless to say, I won’t be near any bus stops, or the Greyhound bus station! If you liked my article, feel free to hit the green button to the right. I’ll have my virtual paperboy throw one on your email porch every Friday.