When Fees No Longer Fit: How to Fire a Financial Advisor

People usually search for “how to fire a financial advisor” at a moment of discomfort, not anger. In most cases, the relationship itself is fine. What has changed is that the investor has begun to add up the fees and is no longer comfortable with how they work.

For many investors, that realization happens after years of paying a percentage-based fee as assets grow. What once felt reasonable can start to feel misaligned, especially when the work being done has not changed much over time.

“Firing” an advisor is rarely about conflict. More often, it simply means ending an advisory relationship and transitioning to a different pricing model, such as flat fee advice. Understanding how that process actually works removes much of the fear and hesitation that keeps people stuck.

Ending an Advisory Relationship Is a Process, Not a Confrontation

Despite the language people use, changing financial advisors is not a dramatic or unusual event. It happens every day across the industry.

Advisors do not need to approve your decision. You are not required to justify it. The mechanics of ending the relationship matter far more than the conversation surrounding it.

Once you understand how accounts are held and transferred, the process becomes administrative rather than emotional.

You Are Not Required to Talk to the Advisor You’re Leaving

Many investors assume they must have a difficult conversation before they can move on. Technically, that is not the case.

You are not legally required to speak with an advisor before transferring your accounts. Some people choose to do so, particularly if the relationship has been long-standing or personal. Others prefer not to, especially if they are concerned about pressure, persuasion, or an uncomfortable reaction.

Whether you communicate directly with the advisor you are leaving is a personal choice. It depends on your tolerance for that conversation, not on what is required for the transition to occur. The transfer itself does not hinge on that discussion.

How the Transfer Process Actually Works

What happens next depends largely on where your accounts are held.

Accounts at Retail Custodians

If your accounts are held at large retail custodians such as Fidelity or Schwab, the process is often straightforward.

If you are changing custodians or moving to a new advisory firm, the transfer will typically involve paperwork initiated by the new custodian or advisor. This authorizes the assets to move from one firm to another.

If you simply want to remove the advisor and have the account treated as a retail (self-directed) account at the same custodian, the process is often even simpler. In many cases, it can be handled with a phone call or online request to the custodian or the existing advisory firm.

Once authorized, the assets move through standard custodial processes. The advisor you are leaving does not need to approve the transfer or take action for it to occur.

Accounts at Non-Retail or Proprietary Platforms

In other situations, particularly when accounts are held through firms that do not use retail custodians, transfer paperwork is usually required.

This paperwork is typically completed through the new firm you are moving to. Even in these cases, the process is administrative rather than confrontational. Once authorization is provided, the new advisor or custodian handles most of the logistics.

Why Transfers Are Routine

Behind the scenes, most securities transfers move through standardized industry infrastructure rather than through individual advisors. Publicly traded stocks, ETFs, and mutual funds are generally held and transferred through centralized clearing and custody systems, including the Depository Trust Company (DTC) and related transfer networks.

The practical takeaway is simple: transferring accounts is a routine, system-driven process. Advisors do not manually move assets, approve transfers, or control the mechanics once a client authorizes the change. Transfers occur at the custodian level through established procedures.

This is why most transitions are procedural rather than personal. The system is designed to function even when the advisor being left is not involved.

 What a 30-Day Notice Clause Usually Means

Some advisory agreements include language requiring 30 days’ notice to terminate the relationship. Seeing this clause can make people feel trapped or believe they must wait before moving their accounts.

In most cases, that is not how these provisions work.

A notice requirement typically governs when the advisory agreement formally ends and how final fees are calculated. It does not usually prevent you from transferring your assets.

In addition to the advisory agreement itself, registered investment advisors are required to disclose their termination and billing practices in Form ADV Part 2A, which is publicly available through the SEC’s Investment Adviser Public Disclosure (IAPD) system. In many cases, the ADV Part 2A provides more specific guidance about what actually happens upon termination.

For example, while an advisory agreement may reference a 30-day notice period, the firm’s ADV Part 2A may state that fees are prorated through the date of termination. When that language exists, the practical expectation is often that fees stop accruing when the relationship ends, rather than continuing for a full additional billing period.

What a notice clause often affects:

• Whether a final prorated fee is charged
• The formal termination date of the advisory agreement

What it generally does not do:

• Prevent account transfers
• Require advisor permission
• Allow assets to be held back

The custody of your assets and the advisory agreement are related, but they are not the same thing. Reviewing both the client agreement and the firm’s ADV Part 2A provides a clearer picture than relying on a single clause in isolation.

Proprietary Investments, Transfers, and Tax Considerations

In some cases, the investments held in an account can affect how easily it can be transferred.

Certain advisory programs use proprietary or firm-specific investment products that cannot be held outside that firm’s platform. For example, some managed account programs use proprietary funds that are only available within that firm. Edward Jones’ BridgeBuilder funds and Fidelity’s Strategic Advisers funds are common examples.

These investments cannot be transferred “in kind.” Before the account can be moved, those positions generally need to be sold. This is usually a straightforward administrative step, but it may require a phone call or written instructions to authorize the liquidation.

This is not a penalty or a restriction on leaving. It is simply a mechanical limitation of proprietary products.

Where this becomes more relevant is in taxable accounts. If proprietary funds are held in accounts such as individual, joint, or trust accounts, selling them may trigger capital gains taxes if there are unrealized gains. That does not prevent a transfer, but it can influence how and when the transition is handled.

In practice, investors sometimes choose to:

• Transition gradually rather than all at once
• Coordinate sales with other tax planning decisions
• Accept a short-term tax cost in exchange for long-term structural benefits

Taxes rarely prevent a change. They simply add a planning layer to the process.

Why Fee Structure Often Becomes the Catalyst

For many investors, the decision to change advisors has little to do with the quality of advice. It’s driven by how fees evolve over time.

In percentage-based arrangements, costs rise as portfolio values grow, even when the scope of advice remains largely unchanged. Over time, that dynamic causes investors to pause and reassess whether the pricing structure still reflects the value they’re receiving.

That reassessment is often when people begin comparing advisor pricing models more intentionally, including the differences between AUM and flat fee arrangements. The decision is rarely about dissatisfaction. It’s about alignment between cost, structure, and current needs.

What Changes (and What Doesn’t) After the Switch

What changes depends on the type of advisory relationship you move to.

In some cases, the most noticeable difference is how fees are calculated and how costs behave over time. For example, moving from a percentage-based fee to a flat fee changes how costs scale as assets grow. In other cases, the pricing model may remain similar even though the advisor relationship changes.

What does not change:

• Ownership of your assets
• Custodian protections
• Your ability to access and move your accounts

Changing advisors changes the structure of the relationship, not your control over your money.

Structure First, Emotion Second

Ending an advisory relationship does not mean the advisor did anything wrong. It simply means the structure no longer fits where you are today.

Understanding how transfers work, what contracts actually require, and how pricing models differ makes it easier to act calmly and deliberately. Clarity, not confrontation, is the right starting point for any change.