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What happens if my advisor retires or dies?

Ask if you are a client of the firm or of that person. Get a backup name in writing before you sign. The custodian account should stay in your name.

The short answer

Ask whether you are a client of the firm or of that person. A firm can move you to another adviser. You can refuse and leave. A solo practice needs a written backup, because there may be no one else at the firm to call. The custodian account should stay in your name either way. The adviser's retirement does not move your securities into their estate if the custodian holds them for you.

There is no Form ADV checkbox that says "here is the person who inherits you." The agreement, the brochure, and the brochure supplement about that person are where a backup is named, if it is named at all. Ask before you sign, not after the funeral.

QuestionA useful answerA weak answer
Am I a client of the firm or of you?"Of the firm. Here is the agreement name.""Don't worry about that."
Who emails me the week you leave?A named person, with a phone number"The team"
Is the backup in writing?A sentence in the agreement or a continuity memoA promise in the hallway
Where is the account?A custodian, in your name"We hold it here"
Can I leave if I dislike the replacement?Yes, and here is the termination clauseSilence. Read firing the adviser anyway

What to do

  1. Send this before you hire, and send it again if you have been a client for years and never asked: "If you retire, die, or leave the firm, am I a client of the firm or of you? Who contacts me that week? Is the account at a custodian in my name? Where is the backup written?"
  2. Open the firm on Search. If the firm is one person, treat the backup answer as part of the fee. You are paying for a practice that can go dark. If the firm has many advisers, ask whether you can meet the backup once, now.
  3. Read Item 9A and match it to the statement. The goal is an account the custodian recognizes as yours, so a death at the advisory firm does not freeze the only record of the assets. Does my advisor have my money?
  4. Ask for the brochure supplement on the person you meet, Form ADV Part 2B, if they have one. It describes that supervised person. It is not a will. It tells you who you are relying on.
  5. Read the termination clause in the same sitting. If the replacement is a bad fit, you end the agreement and tell the custodian where to send the shares. You do not need the retired person's permission to talk to the custodian.
  6. Keep your own copies of the plan, the last statement, and the login to the custodian.

What to look for on Best Investors

  • Item 5B(1). On this site that count is employees who do advisory work. One person is not a bad firm. It means the backup question matters more. Confirm the count on the filing, not on a team photo.
  • Item 9A. Custody by the adviser, or a related person, is the fact pattern you do not want to discover in a crisis. Fee deduction is a narrower Yes. The brochure should say which.
  • The person page and the firm page. The contract's cover page has the firm name. Match it to the CRD you looked up. The CRD is the firm's ID number.
  • Item 11 on both the firm and, if you can find it, the person's BrokerCheck record. A successor you have never heard of still gets the same read. How to read Item 11 and how to check registration.

Common mistakes

  • Assuming a large brand solves this. Ask whether the account stays if the person leaves. Wirehouse vs independent RIA is the structure. The backup is still a name.
  • Keeping the only copies of statements in the adviser's portal. Download a statement to your own files once a year.
  • Sharing your custodian password with the adviser. They can have trading authority under the contract without your password. If they die, you still need a way in. The password that only they knew is a mess you made.
  • Staying with a replacement you have not met, because moving sounds hard. Moving is a form at the custodian. Read it before you need it.
  • Confusing this with firing them. Retirement is their exit. Firing is yours. The custodian steps are similar. The notice steps are not. Use the firing page when you are the one ending it.

Related questions

What if there is no backup?

Decide whether you accept a practice that depends on one living person. Some clients do, with the custodian login in their own hands and a plan PDF at home. If that is not acceptable, hire a firm that names the second person now.

Does the new adviser inherit the fee?

The old agreement may let the firm continue it. Read the assignment language. A new person does not get a free pass on the fiduciary sentence or the fee. Ask the replacement for both in writing before you stay. How do I know if my advisor is a fiduciary?

What do I do in the month after?

Call the custodian first if you cannot reach the firm. Confirm the account is open and that no one has changed the address. Then call the firm, or the named backup. Then decide whether to stay. Do not sign a new percent agreement in the same call that announces the death.

What if they sold the firm?

You should get notice. Read whether your contract was assigned and whether you can reject the assignment. The buyer is a new firm to check on IAPD, even if the office looks the same.

Limits

This page is the list of questions to ask before a person is gone. It is not estate advice, not legal advice, and Best Investors is not the SEC. Your own will and the account's beneficiaries are separate documents. The adviser should not be the only one who knows where they are.

The backup name is in the contract or it is missing. The filing will not score a succession plan for you.

If our copy and IAPD disagree, use IAPD.

Sources

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