What Happens When Your Financial Advisor Leaves or Retires?

When your financial advisor leaves or switches firms, you’re often forced to make an important decision without much warning. On one hand, you may trust your advisor personally and want to stay with them. On the other, moving to a new firm can bring unwanted complications and stress.

This article explains what to do after your financial advisor announces a departure, including which questions to ask and how to decide whether to follow them or remain with the existing firm. We’ll also cover potential warning signs, transfer fees, and other complications to review before making a final decision.

Why Financial Advisors Leave or Switch Firms

If you’ve known your advisor for several years or even decades, they may retire or leave their firm to pursue a new opportunity. In 2025, WealthManagement.com reported that at least 11,172 experienced advisors moved firms.

While retirement is one common reason an advisor may announce their departure, professionals leave or switch firms for several reasons, each of which may affect clients differently:

• Moving to a firm with better compensation, career opportunities, or professional freedom.
• Starting their own registered investment adviser, or RIA, firm.
• Responding to a merger, acquisition, or internal restructuring.
• Being terminated because of a compliance or disciplinary issue.

As a client, it’s important to understand why your financial advisor left and ask them or their former firm for clarification. If they’re joining or starting another firm, you may have the option to follow them and receive comparable or, possibly, better service. A retirement, termination, or regulatory concern, however, may limit your options and warrant a more careful review of the circumstances.

What to Do First When Your Advisor Leaves

When your financial advisor leaves their firm, whether due to retirement or another reason, a good first step is to gain clarity on the situation. Once you understand what happened and what it means for your accounts, you can begin determining what comes next.

Before acting, however, it’s smart to avoid panic or making an emotional decision. “The first thing you should do is nothing,” says Jacob Bayer, CFP^®, WMCP^®, founder of Jacob Bayer Wealth Management. He explains that your money is not simply “gone” because your advisor has left. Instead, take time to assess the circumstances of the departure and consider whether it makes more sense to follow the advisor, remain with the existing firm, or find a new professional.

The next step is to ask your advisor questions to determine if you should continue with them or stay with your current firm. Below is a shortlist of questions to consider asking:

• Why are you leaving the firm and where are you going next?
• Who will manage my accounts during the transition?
• Can I follow you to your new firm, and would all of my accounts be eligible to transfer?
• If I follow you to your new firm, how will my service change there (fees, investment options, mode of interaction, etc.)?
• Are there any investments that cannot be transferred without being sold?
• What steps or paperwork would be required if I decide to stay or move?

These questions can help you begin deciding which option best supports your needs and financial goals. It’s also worthwhile to contact a representative at your current firm and ask them about the situation. This way, you’ll have two reference points and a better understanding of the options in front of you.

Should You Follow Your Advisor or Stay With the Firm?

Choosing whether to follow your advisor or stay with your firm is a big decision that hinges on several aspects. While your relationship with the departing advisor is important and may be enough to make you consider following them, you should also compare the services you receive now with what the new firm would provide.

“There are multiple factors to consider when deciding if you should follow your advisor to their new firm,” says Jason Steeno, president of CoreCap Investments and CoreCap Advisors. He notes that an advisor’s move should benefit clients rather than primarily serving the advisor’s own interests. For example, clients should be cautious if the transition introduces new fees without providing a corresponding improvement in service or value.

It may be an easier choice to follow your advisor if you have an excellent working relationship and have been pleased with their service over the years. Alternatively, their new firm may have better fees and services, which may also be appealing. Either way, Steeno recommends reviewing “the new firm’s Form ADV, Part 2A, which lays out a great deal of good information on the new firm that should answer most questions.”

Conversely, Bayer cautions to watch “for vagueness and pressure with the higher costs and lower clear value with the new firm.” He also adds that if you see “products with surrender charges and high expense ratios,” it should raise questions about whether the costs are justified by the value your advisor and the new firm would provide. Even if you liked your previous advisor, it’s likely not worth the effort to transfer if you’ll end up with higher fees or worse services due to lesser resources.

Costs and Transfer Concerns When Switching Firms

Before following your advisor to a new firm, it’s important to understand how the move could affect your investments and what fees it may incur, if any. While many account transfers are relatively straightforward, certain holdings or firm policies can create added costs or complications.

“The good news is that most transfers between firms are done ‘in kind,’ which means investments do not need to be sold and repurchased by the new firm,” says Steeno. In most cases, this allows clients to move their existing holdings without creating a taxable event.

However, Steeno notes that proprietary investments available only through the current firm may not be transferable. He explains that these types of assets may need to be “sold or continue to be held at the current firm if they are not liquid investments (alternatives, private placements, etc.).” Selling investments in a taxable account could potentially trigger capital gains taxes, so it’s vital to confirm which assets can transfer before authorizing the move.

Another point to keep in mind is that the moving process may briefly limit access to your money until it’s complete. “There will be a time period of a few days when you may not be able to request withdrawals as your accounts are being moved to the new firm,” Steeno says. This may be especially noteworthy if you have upcoming cash needs.

Finally, you should be aware that some firms may charge a fee to close your account. According to Steeno, these are often “in the range of $75 per account” and typically deducted from the assets before the transfer occurs.

Bottom Line

When your financial advisor leaves or switches firms, you don’t need to jump to an immediate decision. First, take time to understand why they left and learn as much as you can about where they’ll be, especially if you built a longstanding rapport. Then, you can decide between staying with your current firm, leaving to follow your advisor, or even finding a new company to work with.

Ultimately, the best choice is the one that continues to support your financial goals and gives you confidence in the advice you receive. Whatever you decide, carefully comparing your options beforehand will put you in a better position to make an informed decision.