FA Playbook

Is your broker switching firms? Weigh your options before deciding whether to follow

Key Points
  • If your broker switches firms, you don't need to immediately decide what to do with your investments, says Barry Glassman, founder and president of Glassman Wealth Services.
  • Take time to carefully weigh your options, whether that be staying with your current brokerage firm, following your broker or switching to a new outfit.
  • "Remember, it's your money," Glassman said. "You're in control."
Switching brokers

You've been working with a broker for a number of years, enjoying the fruits of a mutually beneficial investing relationship, when they announce they've left their brokerage firm for what they hope are greener pastures.

So where do your loyalties lie — with the individual broker or their now ex-employer, where all your money is parked? Should you stay or should you go?

You actually don't have to do anything right away, said Barry Glassman, certified financial planner and founder and president of Glassman Wealth Services. In fact, you shouldn't. "Remember, it's your money," he said. "You're in control.

"Take your time and find the place that's right for you."

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Don't succumb to the sales pressure that's headed your way — from either side. "Don't be surprised if on the same day you get a call from your broker who left and went to another firm, you get an aggressive call from a new person you haven't met at the old brokerage firm," Glassman warned. "This person has been assigned to you and tasked with keeping you at that firm."

And remember, your old broker most likely got a huge incentive from their new firm to make the switch — so they're not going to starve whatever your decision may be. Far from it. "That broker received two, three or four times the total revenue they generated for their prior firm during the prior 12 months."

Take your time and consider all of your options, Glassman cautioned. There's no urgency about deciding what to do. "Use this opportunity to see what else is out there," he advised, whether that be with other brokerage firms altogether or even independent outfits.

Reevaluate what kind of advice you need and what firm or person you want to work with to give you that advice.

The ball is in your court, Glassman reminds clients. "You can take the time to hear out your prior broker who's at a new place and [also] take the time to not just hear from the new broker who's assigned to you but … speak with a branch manager and ask to interview a few different advisors at the existing brokerage firm and hear them out," he said.

In the end, Glassman said, "reevaluate what kind of advice you need and what firm or person you want to work with to give you that advice."

— CNBC's Carmen Reinicke contributed to this report.