What should I do when my financial adviser retires?

Is my financial adviser likely to retire soon?

According to a survey carried out by Investec, 41% of people think their adviser will retire in the next 5 years and 21% in the next 2 years.

One in five people who use financial advisers said they were “very concerned” about the prospect of them retiring, with a further 26% saying they were “quite concerned."

Other surveys show that half of all financial advisers are planning to retire within the next five years, with the average planned age of retirement sitting at just 52.

Why are so many advisers retiring?

Here are some of the core reasons for high retirement rates in the financial advice industry:

• Aging demographic: A significant proportion of financial advisers are nearing traditional retirement age, leading to a natural, high-volume exit from the industry.

• Increased regulatory burden: New regulations like Consumer Duty in the UK have dramatically increased compliance costs and paperwork, with some studies showing 11% of advisers are leaving due to this pressure.

• Mental health and stress: The combination of regulatory demands, market volatility, and client anxiety has caused many to face burnout.

• Lack of new talent: The industry is struggling to attract younger, diverse staff to replace those leaving, creating a "talent gap".

• Attractive business valuations: Many advisers are finding it financially viable to sell their firms and retire early.

Should I be worried if my financial adviser retires?

Financial advisers are our guiding lights as we work toward our financial goals, and, as such, we can become reliant on them and accustomed to their help and support. 

This can make it difficult when they decide to retire, and you need to find someone to take their place. 

Although your adviser's retirement marks a significant change, it doesn't have to be a bump in the road. 

A trusted financial adviser should inform you of their intention to retire well in advance, giving you ample time to prepare your finances accordingly.

With careful planning and the right steps, you can easily ensure a smooth transition and continued progress towards your financial goals, allowing for peace of mind and greater clarity.

This article will guide you through the crucial considerations and key steps when your financial adviser retires.

From understanding your options to finding a new financial adviser who's the right fit, we'll help you navigate this important transition confidently.

What do I need to do when my financial adviser retires?

There are many factors to keep in mind once you’ve learnt your financial adviser has decided to retire.

Review your financial plan

Gather all your important financial documents, including investment statements, pension documents, tax records, and any correspondence with your retiring adviser.

Review your existing financial strategy, including your goals, risk tolerance, and asset allocation. This is an excellent opportunity to reassess and make adjustments as needed.

Talk to your adviser about their retirement plans

Have an open conversation with your adviser about their retirement plans.

Will they be staying on in a limited capacity? Are they passing clients on to a successor in the firm? If so, find out about their successor's qualifications, experience, and approach to financial advice. 

Do they have an investment philosophy similar to your retiring adviser's?

If your retired financial adviser recommends a new adviser outside their firm, ask why they chose this person and how the transition will be managed. 

It’s important to know as many details as possible before entrusting your finances to a new adviser, which can be much easier with the help of your previous financial adviser.

Choose a new financial adviser

If you're not staying with your adviser’s current firm, you'll need to find the right financial adviser that suits your needs. 

Reach out to friends, family, or colleagues who have personal financial advisers they trust. 

Online resources like Unbiased can assist you in finding advisers in your area and highlighting their qualifications.

When searching online, use specific terms like 'financial adviser UK' or 'independent financial adviser near me' to help narrow your options.

Think about what's important to you with an adviser.

Do you prefer someone with a specific area of expertise? Do you value a particular communication style? Research their fees and how they charge for their services to ensure you find the right financial adviser.

Ensure a smooth transition

Once you've chosen a new financial adviser, you must ensure a smooth transition of your accounts and information.

The following can help the process move along efficiently for both you and your new adviser:

Document transfers: Your new personal financial adviser can help facilitate the transfer of your investment and pension documents from your retiring adviser. This will likely involve completing transfer forms and providing your adviser with the authorisation to access your accounts.

Get to know your new adviser: Schedule an initial meeting to discuss your financial goals, risk tolerance, and investment preferences. This is your chance to establish a strong working relationship and ensure you're comfortable with their approach.

Monitor the transition: During the transition period, monitor your accounts closely to ensure everything is transferred correctly and your investments are managed according to your plan. Don’t hesitate to contact your new financial adviser about any queries or concerns.

Get expert financial advice

Use your financial adviser’s retirement as an opportunity to look over your financial plan, reassess your goals, and decide what you are looking to get out of any financial advice.

Once you assess what your needs are, you can find a new adviser who can step into the shoes of your retired financial adviser and keep you on track. 

If you’re looking for the right financial adviser, Unbiased can match you with a financial expert who will work with you to achieve your short-term and long-term goals.