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Timing firing my Financial Advisor

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  • Avatar natashaa71 
    Participant
    Status: Physician
    Posts: 4
    Joined: 01/05/2019
    Splash Refinancing Bonus

    I’ve finally made the decision to DIY and fire my FA, but have a question that may seem pretty dumb. In order for my funds to be transferred, my current FA (with UBS) will have to “sell” everything to transfer my money into a settlement fund before it can be transferred to vanguard. Isn’t that in essence like “selling low” considering how weak the market has been lately? Should I wait it out until (hopefully) the market comes back some and then make the move?

    #178772 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 6902
    Joined: 01/09/2016
    1. No, your advisor can transfer “in kind” and not sell
    2. No, you should never time the market.

    Did you consider that, should your advisor liquidate and send you a check to buy back in that you would also be buying low? Don’t get sucked into playing the timing game – you will lose to Mr. Market 90% of the time.

    Welcome to the forum!

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~ 270-247-0555
    https://fox-cpas.com/for-doctors-only/

    #178777 Reply
    Liked by CordMcNally
    ENT Doc ENT Doc 
    Participant
    Status: Physician
    Posts: 2662
    Joined: 01/14/2017

    There is no good timing for a wounded heart:

    #178782 Reply
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 1606
    Joined: 01/03/2017

    The best time to do it was yesterday. The next best time is today.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #178785 Reply
    q-school q-school 
    Participant
    Status: Physician
    Posts: 2176
    Joined: 05/07/2017

    vanguard will take care of everything for you.  as johanna said, they will transfer in kind so essentially instead just change of people holding the documents of mutual fund ownership, not a sell and replace situation.

    just fill out the forms, have recent (90 day) statement, get the medallion signature, mail to vanguard.

    easy peasy–except for the medallion signature part

     

    #178787 Reply
    Liked by Bmac, Vagabond MD
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 1692
    Joined: 03/01/2018

    Maybe your FA makes a commission on the sell. Trying to squeeze a few more bucks out of you on the way out. Do you know how much trading fees and potential commissions you pay in your current situation?

    Transferring in kind to Vanguard is probably best. But you’ll potentially have to pay (smallish) fees at Vanguard to sell.

    The decision whether to liquidate and transfer cash, or transfer in kind depends on the trading fees and commissions at current institution and at future institution, whether holdings have capital gains or losses, whether your current holdings align with your long term goals. If you’re going to DIY, you’ll want to consider these factors.

    If you’re uncertain, you can post details here and we’ll help. Vanguard also has advisors that can help you figure your best course of action.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #178794 Reply
    Liked by Hank
    CordMcNally CordMcNally 
    Participant
    Status: Physician
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    Joined: 01/03/2017

    When you do transfer in kind to Vanguard, make sure you keep track of your cost basis because depending on how long you’ve had the funds, that information may not flow easily over.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #178795 Reply
    Liked by Tim, jacoavlu
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 1392
    Joined: 09/18/2018

    1) Make sure you have the DETAILS of all holdings you are transferring. This purchase information will be needed when you eventually sell.
    2) The medallion signature can be frustrating.

    Historically, shareholders have tried to obtain a medallion signature from the banking institution that they transact business with. If you are not a customer of a participating financial institution, it is likely the financial institution will not guarantee your signature.
    First check with your bank. Depending on the amounts, different approvals. Guaranteeing gives the bank liability. Sending from ML to Vanguard is zero benefit to your bank. It must be submitted in person, most likely approved days later by a different department. You may have to establish a new banking relationship. We ran into a $100,000 limit several years ago on a relatives account. Finally, I had to open a new account Uber his name and a joint account with he and my wife. Check the box mentality within the process. If it’s over $100k, call your bank right away. Good luck.

    #178811 Reply
    Avatar ajm184 
    Participant
    Status: Other Professional
    Posts: 511
    Joined: 07/14/2017

    Glad I have not had to obtain a medallion signature guarantee where I live presently.  Given my old office was in the Loop, a quick saunter over to LaSalle street and getting one was easy.

    Let Vanguard handle as much of the transfer process as possible, that way you don’t have to deal (or minimally deal) with your FA.

    #178838 Reply
    Liked by MPMD
    Avatar Anne 
    Participant
    Status: Physician
    Posts: 774
    Joined: 11/07/2017

    When I did it, I just called Vanguard and they walked me through it.  It was pretty easy as I recall.  Just transferred in kind.  I did not need a medallion signature guarantee to do it.  The only time I needed a MSG was for a transfer on death account from my grandfather.  It was a pain because I bank with USAA.  They gave me the option of going to San Antonio TX to get it done.  That was not going to happen.   I was still using my financial advisor at that time and his office was able to do it for me.  Looking back, one of the few times that I was really happy with the FAs service, and one of the few downsides of banking with USAA.

    #178843 Reply
    Liked by Tim
    Vagabond MD Vagabond MD 
    Participant
    Status: Physician
    Posts: 3011
    Joined: 01/21/2016

    I would go so far as to say that once you start thinking about moving on from your FA, you should probably just do it ASAP. There really is no downside.
    1. They will always take you back.
    2. They might over lower rates or other sweeteners to keep you, especially if the cost is the primary concern.
    3. You can always go somewhere else.

    I agree with the others re “transfer in kind”. Move your assets to your brokerage of choice, and then take the time to figure out what should be sold and when. This does not depend on market conditions but whether the current investments are the best choice for the future and whether or not there is a tax hit (and how much).

    "Wealth is the slave of the wise man and the master of the fool.” -Seneca the Younger

    #178850 Reply
    Liked by Tim
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 1392
    Joined: 09/18/2018

    Anne’s experience was a change of ownership and my experience was with that as well. MSG probably is not required for the same owner. Transfer from ML to Vanguard most likely doesn’t need MSG.

    #178851 Reply
    Avatar natashaa71 
    Participant
    Status: Physician
    Posts: 4
    Joined: 01/05/2019
    Earnest refinancing bonus

    Thanks everyone for the input! I’m excited to move on and close that less knowledgeable/less in control of finances chapter of our life 🙂

    #179078 Reply
    Avatar chambers136 
    Participant
    Status: Spouse
    Posts: 9
    Joined: 07/27/2017

    There’s no guarantee that Vanguard is able to accept the funds that you hold as a transfer in kind. When I was looking to do this, Vanguard and Fidelity could each accept about half of the funds, but Schwab could accept all of them. We went with Schwab. Call around and give them the fund tickers. They’ll tell you if they can accept them or not.

    #179388 Reply
    Avatar momentumstocks 
    Participant
    Status: Other Professional
    Posts: 7
    Joined: 10/31/2018

    I do not understand why anyone needs a FA?

     

    1) Index funds

    2) Bonds

    3) Property

    4) Hard assets

    5) <10% high risk…if you want

     

    why do you need to hire someone to tell you this?

    #180763 Reply

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