reasonable privacy with my financial advisor

[mini me]

Hi all - I'm new. :)

In 2019, I moved my money from Vanguard to a Charles Schwab advisor who is a friend of my dad's.

Since then, there have been a couple of conversations which led me to believe that I'm a topic of conversation between the two of them. This makes me uncomfortable.

I like this advisor. He's always super helpful when I have questions, so I'd prefer to stay where I am, if possible.

In November, I'm going to be in his area, and we're going to talk face to face for the first time.

Is it reasonable for me to speak up about my need for privacy between the the two of us? That my relationship with him is to be completely seperate from his relationship with my dad? Or am I being naive?

[Catbert]

Completely reasonable to expect your financial advisor to not discuss you with your father (or anyone else). 

[Gronnie]

It's extremely unprofessional and definitely unethical for him to discuss your financial details with anyone but you without your permission. Possibly even illegal.

[Ron Scott]

I wouldn’t deal with him, period. What are you using him for?

[Metalcat]

Find out what the policies of the company are.

If you are entitled to privacy of your information, then this person has breached their contract with you. If you are not contractually entitled to privacy, then don't divulge anything you don't want shared, and don't depend on people to preserve your privacy without a contract in place protecting it.

Regardless, stop doing business with this person, they've already violated your privacy. This is completely unacceptable.

[Dicey]

Joining the chorus. NopeNopeNope. Even if the dude just tells your dad that you're doing fine or that he admires your savvy or whatever, it is a breach of your confidence and 100% not okay. Also, your Dad should not ask, nor should he allow it to be a topic of discussion. He should have pushed back, but hey, he's proud of you.

And you know this crowd is going to give you shit for moving from our beloved Vanguard to anywhere else. Reversing that move would eliminate the problem.

[JJ-]

There are plenty of helpful advisors. I'd suggest going elsewhere and avoiding the situation entirely by just saying "I'd prefer to pave my own path."

[maizefolk]

Agree with those above. You may or may not have a contractual right to insist that this advisor not discuss your finances with your father. You absolutely are reasonable to feel uncomfortable with your parents knowing stuff about your finances you didn't tell them. But the best path here is to just switch to a different financial advisor (or not use one at all, which is what I would recommend but not what you asked about).

The alternative is that you ask the advisor not to and the next time your father says something that suggests he has more visibility into your finances than he should sue your family friend and subpoena  your father to testify on what he did or didn't hear from your advisor. That just seems like a lot of stress and angst vs the modest work of moving your investments elsewhere (ideally self directed or just a different FA).

[Sibley]

I wouldn't have advised you to move from Vanguard to Charles Schwab in general, but ok.

Your only truly effective and permanent solution to this is to move your money. Fidelity or Vanguard. Given you clearly weren't happy with Vanguard, I'd suggest Fidelity.

Also, am guessing that you're uncertain about the stock market, since you feel the need to have an advisor. Education will help. Start with J Colins stock series.

[mistymoney]

gosh - I think you should report him to the company this is so egregious.

That you are not outraged and angry is kind of a red flag. What's going on?

[HPstache]

First problem: moving FROM Vanguard TO Schwab

[reeshau]

Add another vote for:
1)  You should expect personal privacy
2)  It may be difficult to get with this situation
3)  No real reason to move from Vanguard to Schwab in the first place

Adding details:
This is a fairly common occurrence, for parents to be interested in, and have their children see their adviser.  It is probably a good thing to know this person, even if just for estate planning purposes.  For the advisor, it's a way to keep the money in service when the generations change.

To do this, they probably have you set up as an account under your Dad's.  From Schwab' s website:

Dedicated Financial Consultants are generally made available to clients with $250,000 or more in assets at Schwab.

https://www.schwab.com/invest-with-us/professional-advice

So, you don't qualify for this service on your own with less than $250k invested.  This may go so far as having your account statement sent to your Dad, as one of his "attached accounts."  Or perhaps it is being done informally.

You might be feeling nervous about investing, but there is a reason for the account minimums:  the company is expecting to generate income from your account with fees.  And less than $250k (which is fairly low for this type of thing) doesn't generate a lot for them.  On the other hand, it will cost you a *lot*, as a percentage of your assets--even more than the regularly-reported 1%.

I am sure it was viewed as a favor to you, but this is likely not a good match for your needs if you are starting out.  And the more you read here, you will find it's largely unnecessary given the investment options now available.

[ysette9]

Hi all - I'm new. :)

In 2019, I moved my money from Vanguard to a Charles Schwab advisor who is a friend of my dad's.

Since then, there have been a couple of conversations which led me to believe that I'm a topic of conversation between the two of them. This makes me uncomfortable.

I like this advisor. He's always super helpful when I have questions, so I'd prefer to stay where I am, if possible.

In November, I'm going to be in his area, and we're going to talk face to face for the first time.

Is it reasonable for me to speak up about my need for privacy between the the two of us? That my relationship with him is to be completely seperate from his relationship with my dad? Or am I being naive?

Have you talked with your father about this? Can you ask him straight up if he and the advisor discuss your financial situation? The reason I mention this is it is probably easier in the short term to reach your father for a conversation than the advisor.

I agree with everyone else. This sounds unethical and in your shoes I would run. There are plenty of advisors out there (make sure she is CFP, not just a financial salesperson) if you want the warm fuzzies of professional help.

[Fishindude]

I seriously doubt any details of your personal finances are being discussed.   That's a serious breach of ethics and no financial consultant in their right mind would do that.   Good way to lose a bunch of clients and possibly your licenses / certifications.

[FIRE Artist]

I seriously doubt any details of your personal finances are being discussed.   That's a serious breach of ethics and no financial consultant in their right mind would do that.   Good way to lose a bunch of clients and possibly your licenses / certifications.

This.  I actually wonder if he isn't using his friendship with your dad as a sales strategy with you, like "your dad thinks this is a great fund", which might be confusing the situation and making you think your dad has details about your investments.  Either way, it is sketchy.

And you are being sold to, make no doubt about that, being "friends with your dad" just made you an easy commission for him, nothing else.  Moving from Vanguard will be a big mistake to your bottom line, and it will just get bigger the more assets you accrue. 

[friedmmj]

Hi all - I'm new. :)

In 2019, I moved my money from Vanguard to a Charles Schwab advisor who is a friend of my dad's.

Since then, there have been a couple of conversations which led me to believe that I'm a topic of conversation between the two of them. This makes me uncomfortable.

I like this advisor. He's always super helpful when I have questions, so I'd prefer to stay where I am, if possible.

In November, I'm going to be in his area, and we're going to talk face to face for the first time.

Is it reasonable for me to speak up about my need for privacy between the the two of us? That my relationship with him is to be completely seperate from his relationship with my dad? Or am I being naive?

I had to read this twice.  My first impression from your post was that the Charles Schwab advisor was communicating with your prior advisor at Vanguard.

[mini me]

Thanks everyone!

[mini me]

I'm not sure if this is allowed, since it's an old thread. If I need to start a new one, please let me know.

So, I finally found a new advisor, and I've filled out all my paperwork.

I wrote to my current advisor (my dad's friend), plus two people who've been helping me. No one has responded.

This is what my agreement states:

This Agreement is subject to cancellation by either party upon written notice to the other. The cancellation shall become effective immediately after notice is received by the other party. Neither party may assign this Agreement without obtaining the other's written consent.

And this was my email to the three:

I want to thank you and express my appreciation for all your advice and guidance over the past few years with my investments. At this time, I’ve decided to move my accounts to another advisor that I feel is a better fit for me going forward. I wanted to notify you as you should be receiving the transfer requests early next week.

If you need this handwritten, I'll be happy to send a note through the mail, and if there's anything else I can do to move this along, please let me know.

All the best to you.

I'm not really sure what 'assign' means? Do they have to respond in writing that they've received this email? Am I doing something illegal if they never respond and my accounts are moved over?

This is a situation where there is no fiduciary duty towards me. My father and I had a falling out, and he bad-mouthed me to his friend, who then sent me to his compliance officer - as if I'm doing something shady. Which I'm totally not.

This is very, very stressful.

If they choose to stonewall, am I breaching the contract if I move my accounts?

[ysette9]

You don’t need to worry. You did a polite thing by sending the note but you didn’t have to. The requests you submitted with the new financial institution/advisor to move your money is all you need to do. The old advisor doesn’t have to agree or give permission or do anything. Let the new institution handle it.

You might get a note back but don’t be surprised if you don’t hear anything.

[mini me]

Never mind - he just sent a really nice note!

[wageslave23]

I'm not sure if this is allowed, since it's an old thread. If I need to start a new one, please let me know.

So, I finally found a new advisor, and I've filled out all my paperwork.

I wrote to my current advisor (my dad's friend), plus two people who've been helping me. No one has responded.

This is what my agreement states:

This Agreement is subject to cancellation by either party upon written notice to the other. The cancellation shall become effective immediately after notice is received by the other party. Neither party may assign this Agreement without obtaining the other's written consent.

And this was my email to the three:

I want to thank you and express my appreciation for all your advice and guidance over the past few years with my investments. At this time, I’ve decided to move my accounts to another advisor that I feel is a better fit for me going forward. I wanted to notify you as you should be receiving the transfer requests early next week.

If you need this handwritten, I'll be happy to send a note through the mail, and if there's anything else I can do to move this along, please let me know.

All the best to you.

I'm not really sure what 'assign' means? Do they have to respond in writing that they've received this email? Am I doing something illegal if they never respond and my accounts are moved over?

This is a situation where there is no fiduciary duty towards me. My father and I had a falling out, and he bad-mouthed me to his friend, who then sent me to his compliance officer - as if I'm doing something shady. Which I'm totally not.

This is very, very stressful.

If they choose to stonewall, am I breaching the contract if I move my accounts?

No need to do anything else.  The "assign" part is on their end.  They can't sell you as client to another advisor without informing you and getting your consent.  People switch all the time.

[mini me]

Thanks, guys!

[Dicey]

Good for you for taking control of the situation!

[maizefolk]

Glad it worked out!

For your question about what "assign" means in that context: It's saying you cannot replace yourself with some other client in the same agreement without your advisor's consent and they cannot replace themself without some other advisor without your consent.

That's typical in a lot of contracts, but not all. For example most mortgages are assignable on the lender's side, which is why you'll sometimes get notices that your mortgage has been transferred/sold from one bank to another without your consent being required or asked for.

[NorthernIkigai]

Good on you for sorting this situation out! Don’t forget to look into whether you could manage your own money, as most people can if they are at all interested.

I’m sorry you had a falling out with your dad. Having a potentially crappy financial advisor is one thing, but falling out with family is not nice. Take care!

[secondcor521]

One thing, just as a heads up - Schwab may charge you an account closure fee of perhaps $75.  It is common and typical for investment companies to do this.  Your new broker may reimburse you this fee depending on how nicely you ask and how much money you're moving to them.

[mini me]

Thank you so much! I appreciate the encouragement!

[Sandi_k]

Thank you so much! I appreciate the encouragement!

One final note: if any of your accounts are in non-tax-deferred accounts, make sure to download all of your statements now - the new brokerage won't have that info on your basis in your investments, so you need to make sure you have those records.

[mini me]

One final note: if any of your accounts are in non-tax-deferred accounts, make sure to download all of your statements now - the new brokerage won't have that info on your basis in your investments, so you need to make sure you have those records.

It's alll staying within Charles Schwab, and I have all my printed quarterly statements. Do I need more than that?

[Sandi_k]

If it's all at Schwab, you should be good!

[mini me]

If it's all at Schwab, you should be good!

Thank you, Sandi!