When to fire a financial adviser

Stephen E Bingham, owner of Bingham Financial Advisory in Arlington, Virginia

No one should make a prac¬tice of changing financial advis¬ers every couple of years. Studies have found that serial changers are rewarded with very poor longterm results in achiev¬ing their investment objectives.

Bear markets alone are not a good reason to fire an adviser.

Any client who has a compe¬tent adviser he trusts should allow that person reasonable time, usually at least five years, to prove his value.

A financial adviser warrants firing if he or she makes unau¬thorised transactions, churns accounts or does anything else that is unethical or illegal.

There are other perfectly valid reasons to fire your adviser. These include highpressure sales tactics, promising high per¬formance or guaranteeing results, failure to listen, and pro¬viding poor service.

Susan G Freed, president of Freed Advisers in Chevy Chase, Maryland

If you discover something is amiss in your account, you will need to sever the relationship immediately. It's best if you have a written record of the infrac¬tions. But if you don't, write to your adviser and copy to their supervisor, requesting detailed information about your account: investment objectives, trading history, fees and commissions, performance information.

It may be time to say goodbye to your financial adviser if he or she is not able to answer ques¬tions to your satisfaction. Are they taking the time to adequate¬ly address your concerns? Do you understand the planning and strategies recommended? If you feel your adviser is dismissive and patronising, or provides incomplete information, it's probably time to consider some¬body else.

David J Kressler, managing partner at Principal Financial Group in Bethesda, Maryland

A strong relationship with a financial adviser is a lot like a successful business partnership. The core ingredients are respect, trust and confidence. It takes time to build but can erode quickly. Aside from outright deceit, an adviser usually causes his or her own "firing" in one or more of the following ways:

l Using jargon without expla¬nation. Nothing is more exasper¬ating than not getting a straight answer to a question.

l Being paternalistic. The adviser who says, "I know what's best for you" without carefully listening to you.

l Adding little value. Are you better off today than when you first started working together?

l Being more interested in selling you something than dis¬cussing options.

l Not returning phone calls or communicating regularly on what is happening with your portfolio.