We are in the days of advisors and professionals jumping from firm to firm like jackrabbits.  Because most of us value the relationship with the advisor and not with the firm, we typically follow our advisor to the new firm.  Computer transfers have made it simple to move assets from one firm to anohter, and for many, the change seems like it occurs at light speed.  Compared to a decade ago, it does.  However, as a wise attorney once taught me “nothing good gets done in a rush.” Here are a few pointers when you are moving from one account to another:

  • Ownership of the new account could change.  Make sure that the type and ownership of the account mirror’s your intentions and the advice given to you by your estate planning professionals.  Many times, accounts move from a tenancy in common format to a joint with rights of survivorship format.  Another major mistake is when you have granted authority to a child to trade or transact business in the old account.  We have seen instances where the child was added as a joint owner on the new account.   If this occurs, that child may inherit the entire account at your death and have too much access to the assets in the account prior to your death.  That child’s siblings may not be too happy about such an arrangement!
  • Ensure that the beneficiary designations match your intentions.  The easiest thing to forget when moving accounts is to properly designate beneficiaires.  We have seen many clients move their IRAs to another firm and in the rush of the move the beneficiary designation is either blank or incorrect.  In the world of retirement accounts, this mistake could cost your beneficiaries decades of continued tax deferred growth.  In other cases, well meaning account assstants may try to convince you that a “pay on death” or “transfer on death” designations are correct, recommended and easier to administer.  This advice is incorrect for the vast majority of our clients.
  • Your risk profile instructions on the new account should mirror those on the old account.
  • The fee arrangement with the financial advisor should be carefully reviewed.  Fee structures in financial institutions can be very simple or can be extremely complicated.  Ask your financial advisor to explain all fees paid to the advisor, the firm and to third parties.  Sometimes you may be surprised at the fees you are paying.  A good financial advisor will happily educate you on these matters.
  • Ensure that powers of attorney associated with the old account are applied to the new account.

If you ever have a question, make sure that you call your attorney or your CPA to get some advice. In most instances, it involves a quick phone call.  As my grandmother used to say “an ounce of prevention is worth a pound of cure.”