When it comes to managing your hard-earned money, your financial advisor should be your trusted partner—someone who truly understands your goals, listens to your needs, and helps guide you through life’s financial ups and downs. But what happens when that trust starts to wane? If you’re feeling like your advisor isn’t delivering the value you deserve, it might be time to reevaluate the relationship.
I know, firing your financial advisor sounds extreme. After all, they’re supposed to be the expert, right? But if you’ve ever found yourself questioning their advice, feeling left out of the loop, or wondering if they’re more focused on their bottom line than yours, you’re not alone. It’s a big decision, but sometimes it’s necessary to take control and find someone who’s more aligned with your financial well-being.
In this post, we’ll explore 10 signs that it might be time to part ways with your advisor—and trust me, by the end, you’ll know whether it’s time to make the switch.
1. You’re Paying an Annual Ongoing Fee but Only Meet with Them Once or Twice a Year
Let’s be real: if you’re paying a fee—whether it’s a percentage of your assets or a flat subscription—shouldn’t you be getting value all year long? If you’re only meeting with your advisor once or twice a year, it’s fair to ask: what are they doing for you the other 363 days?
Your advisor should be proactive. They should be coming to you with ideas on how to increase your success, finding ways to update your financial plan as life changes, and helping you identify tax-saving strategies. You shouldn’t have to chase them down or wonder what’s going on behind the scenes. It’s your money, and you deserve transparency.
So if you ask them what they’re doing for you regularly, and their answer is something vague like “managing your money,” that’s a red flag. Managing investments doesn’t require daily attention. In fact, a well-constructed portfolio of low-cost index funds or ETFs that gets rebalanced once a year will likely outperform most actively managed strategies over the long haul. In 2024, investing is easy—so that’s not where your advisor’s value should come from.
If the bulk of their work is “managing” your money, it might be time to start looking for an advisor who’s focused on delivering real, ongoing value to your financial life, not just showing up once or twice a year.
2. They’re Not Giving You Comprehensive Advice
Your financial advisor should be your go-to for everything in your financial life, not just your investments. That means they should be helping you with your income, expenses, tax planning, retirement goals, charitable giving, insurance—basically, the whole package. If they’re only talking about your portfolio, you’re missing out on some serious opportunities to improve your overall financial well-being.
Financial planning is so much more than just growing your investments. It’s about ensuring you’re on track to meet your life goals, minimizing unnecessary risks, and giving you the peace of mind to live the life you want. Whether that’s through smart tax strategies, better budgeting, or making sure you’re covered in case life throws you a curveball, your advisor should be taking a holistic approach.
Here’s an example: You’re nearing retirement, but your advisor hasn’t talked to you about claiming Social Security at the right time, minimizing taxes on your withdrawals, or how to reduce Medicare premiums. They haven’t mentioned Roth conversions, which could make sense since your tax bracket is lower now. These are huge opportunities to optimize your retirement strategy and save money in the long run. Or let’s say you want to save for your kids’ college education. If they’re not comparing the pros and cons of a UTMA versus a 529 plan or giving you specific savings goals, they’re missing a key part of the plan.
A good advisor should be able to guide you through all these decisions and more. If your financial plan starts and ends with “let’s talk about your portfolio,” then you’re leaving a lot of value on the table.
3. You Rarely Hear from Them Unless They’re Selling You Some Commission-Based Product
An advisor should be there for you throughout the year—updating you on your financial progress, offering strategies, and helping you navigate life changes. But if the only time you hear from your advisor is when they want to sell you something, that’s a problem. Regular communication should be about your goals and financial health, not just a sales pitch.
When an advisor earns commissions on products like annuities, life insurance, or high-fee mutual funds, their advice can easily be swayed by the potential payout they’ll get—not necessarily what’s best for you. Let’s be clear: not all annuities or life insurance products are bad, but you need to fully understand what you’re getting into. The fees associated with these products can be steep, and if they’re not well-explained, you could end up with something that doesn’t align with your financial goals.
Here’s what to watch out for: Pay close attention to the internal expense ratios on mutual funds—they can add up over time, quietly eating away at your returns. If you’re purchasing an annuity, understand the ongoing costs. Even if an advisor tells you there’s “no fee,” that usually means the cost is hidden in the form of a surrender charge—meaning if you try to exit the contract early, you’ll face a hefty penalty. There’s also the concept of “lost opportunity costs,” which means the difference between what you’re earning on the annuity and what the insurance company is pocketing.
At the end of the day, if your advisor is only calling you to sell, and not to check in on your overall plan or progress, it might be time to reconsider the relationship.
4. You Don’t Understand How You’re Invested or Why
You should never feel like you’re in the dark when it comes to how your money is invested. It’s your money, after all, and you deserve to know how it’s working for you. You should have a clear understanding of your investment strategy, asset allocation, and—just as importantly—why certain investments were placed in specific accounts.
If your advisor can’t explain this to you in a way that makes sense, that’s a red flag. Complexity without clarity can often mask higher fees, unnecessary risks, or even investments that aren’t appropriate for your goals. Remember, simplicity is usually the best strategy for most investors. Often, advisors add layers of complexity to make themselves seem indispensable. The more confusing they make it sound, the more likely you’ll think you need them to manage it for you.
Example: Let’s say you ask your advisor why your portfolio contains several high-fee mutual funds, and instead of a straightforward answer, they start throwing jargon at you—terms like “alpha,” “beta,” “Sharpe ratio”—and you’re left feeling more confused than before. They dodge your questions, and you still don’t know what role each investment is playing in your overall strategy. If you find yourself in this situation, it might be time to rethink your relationship with that advisor.
A good advisor should be able to break down your investments in a way that’s easy to understand. If they can’t, they may be adding complexity to justify their own role—and that’s not in your best interest.
5. Your Advisor Doesn’t Listen to Your Goals
Financial planning should be as personal as your goals are. Your advisor isn’t just there to manage your money—they’re supposed to help you achieve your dreams, whether that’s retiring early, buying a second home, or leaving a legacy for your family. If they’re not taking your goals seriously and instead pushing their own agenda, that’s a major red flag.
A common issue with larger firms is they tend to put clients into boxes based on generic questionnaires or algorithms, instead of truly listening to what you want. For example, you might want a higher allocation to equities because you’re comfortable with more risk, but their system says you should have a more conservative mix. Rather than adjusting to your unique preferences and goals, they stick you with a “one-size-fits-all” portfolio that doesn’t really reflect where you want to go.
Your financial advisor should be creating a plan that’s built around your specific goals, not a cookie-cutter strategy. If they’re not listening to what you want, you could end up with an asset allocation or financial plan that doesn’t serve you or fit your aspirations.
6. You Hold Bonds in Your Taxable Account
This one might stir up some debate, and it doesn’t apply to everyone, but it’s still worth considering. Taxes are one of the biggest expenses you’ll face over your lifetime, so your advisor should be doing everything they can to help you minimize them. That includes strategies like Roth conversions, tax-loss harvesting, using tax-advantaged accounts, and—crucially—placing the right investments in the right accounts to maximize tax efficiency.
Here’s the deal: if you hold bonds in your taxable account, it could be a sign that your advisor isn’t paying close enough attention to your tax bill. Why? Because bonds generate taxable interest income, and that income gets taxed at your ordinary income tax rate. For many people, that could mean being taxed at 24% or higher. Compare that to the more favorable long-term capital gains tax rate of 15% that you’d pay on qualified stock dividends or long term capital gains, and you can see how holding bonds in the wrong account can lead to a bigger tax bite.
The bottom line? If your advisor hasn’t talked to you about tax efficiency, or if they’re placing bonds in your taxable account, it might be time to ask them why. You could be missing out on significant tax savings that could make a big difference over the long term.
7. They Charge Based on Your Asset Level
Advisors who charge a percentage of your assets (often called assets under management, or AUM) might seem like they’re aligning their success with yours, but this fee structure can quickly become unfair—especially if you and someone else are receiving the same service but paying vastly different fees. Here’s the thing: you might be paying tens of thousands of dollars more per year just because you have more money invested with them, not because you’re getting more attention or better advice.
Let’s say you have a $2 million portfolio, and your advisor is charging 1%, so you’re paying $20,000 per year. Meanwhile, your friend has $1 million invested with the same advisor and is paying $10,000 for what is essentially the same service. Same advice, same level of attention—but you’re paying double. How is that fair?
It gets even more extreme when you come into additional money. Let’s say you inherit $2 million from a relative or sell a business for the same amount. Now your advisor is managing $4 million of your money, and your annual fee skyrockets to $40,000—just because you’ve added more funds. But here’s the kicker: is it really that much more work for your advisor to manage the additional assets? Likely not. Managing $4 million isn’t twice the work of managing $2 million, yet you’re now paying double the fee.
This type of pricing structure often feels outdated and unjustified. If your advisor charges based on AUM, it’s worth considering if you’re truly getting your money’s worth—especially if your fees keep climbing as your wealth grows, without any corresponding increase in service.
8. They Promise Guaranteed Returns or Unrealistically High Results
If there’s one thing you should always remember about investing, it’s this: no one can guarantee returns in the stock market, or any other volatile investment for that matter. Markets fluctuate, and anyone who promises otherwise is either being dishonest or doesn’t fully understand the risks involved.
If your advisor is throwing out promises of double-digit returns or telling you that a particular investment is “guaranteed” to perform, it’s a major red flag. These kinds of promises usually signal that they’re either trying to sell you something risky—like speculative stocks or high-fee products—or worse, they’re misleading you to get your business. The truth is, any investment comes with risk, and that’s something your advisor should be upfront about.
Trustworthy advisors will help you set realistic expectations and guide you through both the ups and downs of the market. If your advisor sounds too good to be true, it’s probably time to run the other way.
9. They Don’t Recommend Low-Cost Index Funds or ETFs
Low-cost index funds and ETFs are some of the best tools available to investors today. They offer broad diversification, meaning you’re spreading your investments across many companies or sectors, and they do it at a fraction of the cost of actively managed funds. Over time, minimizing fees can make a huge difference in your overall returns, so it’s worth paying attention to the types of investments your advisor is recommending.
If your advisor isn’t suggesting low-cost index funds or ETFs, it’s worth asking why. Are they instead pushing high-fee mutual funds or commission-based products? This could indicate that they’re favoring investments that benefit them more than you. Actively managed funds often come with much higher fees, and yet, many of them fail to consistently outperform simple index funds over the long term.
Example: If your advisor is recommending a mutual fund with a 1-2% expense ratio, that means you’re paying that much in fees every year, regardless of how the fund performs. Meanwhile, a low-cost index fund might have an expense ratio of just 0.03%. Over time, that difference in fees can really add up, and in many cases, the actively managed fund won’t even outperform the index fund.
A good advisor should be looking for ways to save you money, not just recommending investments that generate higher commissions for them. If they aren’t talking to you about low-cost index funds or ETFs, they might not be acting in your best financial interest.
10. They Add Bonds to Your Roth IRA
Placing bonds in a Roth IRA is one of those seemingly small mistakes that can have big consequences down the road. Some advisors do this because, as I mentioned before, they don’t want bonds in a taxable account where the interest is subject to higher taxes. But here’s the problem: placing bonds in a Roth IRA wastes one of the most valuable features of that account—tax-free growth. Bonds typically offer lower returns compared to stocks, so by putting them in a Roth IRA, you’re missing out on maximizing the tax-free growth potential that stocks provide.
These kinds of placement errors can cost you and your heirs significant wealth over time. A Roth IRA is a fantastic tool for building tax-free growth, and bonds, while stable, don’t take full advantage of that benefit. More often than not, if you see bonds in your Roth IRA, it’s because your advisor is trying to fit you into some predetermined asset allocation model or algorithm that their firm uses. They might be trying to hit a specific bond-to-stock ratio without considering the unique benefits of different account types.
Example: Let’s say your advisor follows his firm’s advice of putting 60% of your portfolio in stocks and 40% in bonds, and they apply this rule to both your taxable account, Traditional IRA and Roth IRA accounts. While that might seem balanced, it ignores the fact that your Roth IRA’s tax-free status is ideal for higher-growth assets like stocks, and bonds would be better placed in the Traditional IRA.
A good advisor should customize your asset allocation based on your individual needs and the types of accounts you hold, not just plug you into a one-size-fits-all strategy. If they’ve got bonds sitting in your Roth IRA, they’re likely not thinking about the long-term tax-free growth you could be getting from higher-return investments like stocks.
Conclusion
At the end of the day, your financial advisor should be your partner, someone who listens to your goals, provides clarity on your investments, and consistently adds value to your financial life. If any of the reasons we’ve discussed here are hitting a little too close to home, it might be time to take a hard look at whether your current advisor is truly serving your best interests. Remember, it’s your money, and you deserve an advisor who’s transparent, proactive, and aligned with your financial goals.
Firing your financial advisor isn’t an easy decision, but it can be the best move for your long-term financial health. If you’re ready to explore better options, consider working with an advisor who offers a fee-only, transparent model, and focuses on comprehensive financial planning—not just managing your investments.
If you’re looking for advice that’s truly tailored to you, or If you’re uncertain about how to fire your advisor or what to do after cutting ties, I’m here to help. I can guide you through the process, avoid mistakes and make sure you’re not left alone. Let’s talk about your goals, your concerns, and how we can build a financial plan that’s tailored to your unique needs. Schedule a free consultation with me at The Hourly Advisor, and let’s figure out the next steps together.