By Morey Stettner in MarketWatch, featuring Vincent Birardi, CFP®, AIF®, Senior Wealth Advisor
And what’s your best option if your adviser is making a long-distance move?
More Americans are moving from state to state. Based on 2022 U.S. Census Bureau data, there’s been an uptick in long-distance moves over the past decade. If you’re one of those people, you presumably bid farewell to local service providers like doctors and hair stylists.
But what about your financial planner? If you like and trust your adviser, does it make sense to continue a long-distance relationship?
There’s no one-size-fits-all answer. Assuming you’re satisfied with the expertise and service that your adviser currently provides, it may be possible to remain a client from far away. “If your relationship with your adviser is working well, and your adviser is proactive about staying in touch, that’s a good sign,” said Stu Bradley, a certified financial planner in St. Louis.
The hassle of finding another adviser, transferring your accounts and building rapport with a new team at a new firm can dissuade you from cutting the cord. It’s time-consuming to start over with an adviser who faces a steep learning curve to get up to speed on your goals, risk tolerance and family dynamics.
“If you don’t have to upset the apple cart, it’s best not to do so,” said Vincent Birardi, a certified financial planner in Long Beach, Calif. “But even if you like your adviser, challenges can arise” after your move.
For starters, consider whether your current adviser’s knowledge carries over to your new home state. In common-law states, for example, property acquired during marriage (that is not jointly owned) usually belongs to the person who acquired it. In community-property states, both spouses equally own assets acquired during marriage.
“When moving from one state to another, it can involve how assets are titled,” Bradley said. “That can affect spousal rights, asset distribution and updating beneficiary designations on legal documents.”
Advisers also frequently work with a known team of accountants, estate planning attorneys and insurance specialists to help clients with comprehensive financial planning. It’s important that they all work together seamlessly on your behalf.
If you move, you may prefer to hire a new accountant or attorney who understands state and local laws and rules. It could get unwieldy to keep your former adviser while retaining new attorneys, accountants and insurance agents.
Geography also plays a part. “If there’s a significant time zone change, it can present another communication challenge with your adviser,” Birardi said.
Also consider your comfort level with virtual interaction, says Corbin Grillo, a Houston-based chartered financial analyst. As long as you are at ease relying on video and phone conversations, you’re equipped to continue the relationship after your move. Of course, you’ll want to confirm that your adviser is adept at using videoconferencing tools as well.
Typically, there’s no reason to worry about whether your longtime adviser is licensed to serve clients in your new state. That’s because advisers who serve just a handful of clients in another state usually don’t need to meet registration or licensing requirements in that state. To be safe, you should still ask your adviser, “Once I move, are you registered to work with clients where I’ll reside?”
When advisers move
What if you are staying put but your adviser is moving to a different state? It’s important to ask whether your adviser has registered with the new state’s securities regulator. State rules vary based on several factors, including the nature and structure of the adviser’s firm.
Before you agree to stick with an adviser who’s relocating far from you, Grillo suggests asking three questions:
- Why are you moving?
- How will it impact our adviser-client relationship?
- Will all the services you provide still be provided?
“That last question is especially important,” Grillo said. “You want to make sure services like regular portfolio review meetings, whether annual or more frequent, will continue. And that the adviser’s availability won’t change,” so you can still expect accessible, responsive service.
Said Bradley: “Advisers generally want to keep their clients through a move.”
