Reasons why people don’t change financial adviser

Chris Broome – Chartered Financial Planner

Many people use the same financial adviser for years or even decades without considering making a change.

Even when faced with the reality that you’ve lost trust in your adviser, you still may not take the step to find a better alternative.

Our article today explores the psychological reasons why people tend to stick with their current financial adviser rather than looking for a new one.

Comfort Zone

1.  Loyalty

People may feel a sense of loyalty to their current adviser, even if they are not completely satisfied with their services.

2.  Fear of change

Change can be difficult and people may be hesitant to leave a familiar situation for the unknown.

3.  Lack of trust

People may not trust new advisers or the financial industry as a whole, which can make it difficult for them to switch to a new adviser.

4.  Fear of loss

People may be afraid of losing money or not getting a good return on their investment if they switch advisers.

5.  Complexity

People may have the misconception that the process of switching financial advisers can be complex, and so based on this decide not to take things further.

6.  Limited Information

People may not have enough information about other financial advisers to make a decision.

7.  Belief in the current adviser’s abilities

People may believe that their current financial adviser is the best or that they are not capable of finding a better one.

8.  Apathy

People may simply not be motivated to switch advisers, even if they are not completely satisfied with their current advisor’s service.

In summary

A combination of complacency, hassle, and fear of the unknown all contribute to people staying put with their current financial adviser for many years without seriously considering making a change to someone new.

From our experience from meeting new clients in this situation, once they’ve taken to the decision to meet us, their relationship with the old/existing adviser is coming to an end – it must be for them to be speaking with us.

The truth is this:

  • Changing adviser isn’t a complicated exercise from an administration perspective.
  • The new adviser may not charge any initial fees to onboard you into their firm as a new client.
  • The new adviser’s ongoing fees may be lower/fairer.
  • The new adviser may offer a better all-round service – including being fully independent.
  • If you’re already sat in a room with the new adviser, perhaps that is confirmation in itself that you now need to push ahead with a change.

Next steps

If you have any questions about any of the above, or wish to discuss your long-term financial plans with us, please get in touch. Contact us