Ask Terry Questions Deciding whether to change financial advisor or not.

Deciding whether to change financial advisor or not.

By Terry Savage on October 31, 2023 | Financial Planning / Retirement

My husband and I have been with our financial advisor, who worked for Waddell and Reed, for 20 years. We were very comfortable with him; he called us when he wanted to make changes to our portfolio and we met in person with him 2-3 times a year. My husband and I started our first IRAs at the encouragement of our banker when I was 23 and my husband was 25. We saved like crazy, paid our mortgage off and retired at 58 and 61. We both have traditional IRAs and Roth IRAs and draw off of them for part of our income. I also have a defined pension from my workplace as a municipal employee, from IMRF (not state employee) which is around 98% funded. In July 2021 Waddell and Reed seemed to disappear and LPL took over; new “advisors” but our old advisor is still there. No communication when the changeover took place; my husband went online one Sunday morning and our fund balances were $0 on the Waddell and Reed site. We were panicked! Left a message with our old advisor who called us the next day and said don’t worry everything is OK LPL just didn’t get the word out about the changeover. Since then communication has not improved. Recently the monthly withdrawal that is direct deposited in our bank was not made because the fund was out of money. I noticed this when I was online paying bills, it’s one of the things I check. We called LPL and one of the other advisors said the fund was out of money and he could switch it to another fund, which we agreed to. Our expectation is that one of the advisors would notify us of this upcoming situation and recommend taking money from another fund. We’ve asked our old advisor 2 times to explain what LPL’s role is and what happened to Waddell and Reed. We really don’t understand and I have to say that we are both above average in intelligence; my husband especially understands investments. I have started reading the Chicago Tribune in the past year and read your column. You make things much easier to understand. We are at the crossroad of leaving LPL, but really don’t know if that would be the best decision. I have thought about taking my smaller IRA and Roth IRA and transferring to another advisor and comparing the LPL investments vs. the new advisor’s. The Waddell and Reed sign is still hanging above the entrance to our old financial advisor’s office. When we call our old advisor is rarely there and calls us back in several days. We are no longer comfortable with this arrangement. What are your thoughts about LPL: can you explain what the status of Waddell and Reed is?

Terry Says

I ordinarily edit emails of this length, and delete references to individual firms. But your story is so compelling that I thought the full text should be posted here.
Let me speak in general. Many advisory firms have been acquired by larger firms, and this seems to be the case here. In many cases, smaller advisory firms have founders who want to sell out, or gain the advantage of lower-cost record-keeping and compliance services offered by larger firms.
In the process, individual investors are just moved around like moving containers from a truck to a cargo ship. The client becomes a commodity, and individuality gets lost in the process. And that’s what’s happened here.

Are you still wearing the same winter jacket you loved when you were 25? Are you still driving that old Chevy you loved? Of course not. Time changes all thing. And, in my opinion, it’s time for YOU to change advisors.

BUT, you must be very careful not to jump out of the frying pan and into the fire! There are thousands of “advisors” out there, just waiting for you to fall into their hands. But very few are FIDUCIARIES — who will put that word in writing, saying they will put your interests FIRST (ahead of their own money-making goals). And even fewer are FEE-ONLY advisors, who don’t take any commissions on any products — not mutual funds, not insurance products, not annuities, NO sales commissions (or trips to Hawaii)!

That’s why I have written about a unique matching service for Fiduciary, Fee-Only financial advisors, called Wealthramp. Please click on this link to a box at the top of my website describing how this process works.
It will direct you to an advisor (or several if you want to interview them) you can trust — not only for investments but for financial planning, withdrawals, estate planning etc.
And if you do it, please write back and tell me about your experience!



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