Has the firm you’ve entrusted with your family’s financial life recently been sold? If it has been acquired by a larger advisory firm, often with private equity in the background, a letter is probably on its way, and it may already be somewhere on the kitchen counter or in your email inbox.
The letter will be brief and friendly. It will likely mention new resources, deeper capabilities, and a partnership that made good sense for everyone involved. Somewhere in the letter, usually toward the end, there is a request for your consent.
Most people sign it. Others set it aside and don’t respond at all, which usually has the same effect. A lot of these letters run on what’s called negative consent, where if you don’t object within a stated window, often 30 to 60 days, your agreement is assumed. That’s a legal and common practice, though the particulars vary from firm to firm and deal to deal.
It’s also how a meaningful change to your relationship with the company that manages your wealth can happen without a single conversation. There’s no reason it has to be that way. Firms are sold for a lot of reasons. Founders retire. Partners want to hand the business to people who can carry it further than they could alone. Scale genuinely does buy things that are hard to build one client at a time. But what does that mean for you?
Most advisors welcome questions from clients about ownership changes. Here are ten worth putting on your list.
1. Are you staying, and for how long?
This is the natural place to start a conversation with your financial advisor, because most of the rest depends on it.
When a firm is sold, advisors are usually asked to commit to staying for a defined stretch of time afterward. It’s reasonable to ask whether your advisor signed a retention agreement and when it runs out. That date tells you more about the next decade of your financial life than anything else in the announcement.
2. Who owns the firm now, and who owns them?
Ask about the whole chain of ownership, not just the name that will show up on your next statement.
It’s not unusual for acquiring firms to have outside investors of their own, often private equity, and sometimes more than one layer of ownership. But each ownership entity may have their own timelines and their own expectations for the evolution of the firm that manages your wealth, and you’re entitled to know who is at the top of the structure.
3. Is this the last transaction, or the first one?
Firms that have sold once are sometimes sold again, and a client who has been through one transition usually wants to know whether another is likely.
It’s fair to ask what the ownership plan looks like from here and whether the new owners expect to hold the firm for the long run, bring in new capital, or look at another transaction in the next several years. Nobody can promise you the future, but the question is a reasonable one and most people will tell you honestly what they know.
4. Will my fee change, now or later?
It’s always a good idea to ask about both timeframes, because they’re often different.
Fees may hold steady through a transition and then come up for revision at the next scheduled review. It can be helpful to ask when that review will happen, what it’s based on, and whether you’ll hear about any fee changes in advance. It’s also a good moment to ask what you pay beyond the advisory fee, such as platform costs, fund expenses, or anything billed by an affiliate of the new owner.
5. Will my accounts move to a new custodian?
Ask whether your custodian is changing and whether your accounts will need to be repapered.
If they are, that’s manageable, but it’s worth walking through the details: your cost basis records, your beneficiary designations, your automatic contributions and withdrawals, and any standing instructions you’ve built up over the years. And it’s fair to ask who to call if something doesn’t come across cleanly.
6. Will my portfolio change?
Ask whether you’ll be moved into the new firm’s investment portfolios, and whether any of the holdings in those portfolios are the firm’s own proprietary products.
Then ask about taxes. Repositioning that makes good sense on paper can carry a cost in a taxable account, and that’s a conversation to have before it happens rather than during tax season. Ask what the tax consequences would be for those expected changes and who covers them.
7. What happens to the rest of the team?
Most good financial relationships involve more than one person, like the planner who understands your personal situation, the tax specialist, or the person who answers the phone and can find a document from 2014 in about a minute.
So ask who’s staying. Teams may get reorganized after a sale or acquisition. The answer matters, because a lot of what makes an advisor’s relationship work is the people whose names never make it into the announcement.
8. Will the service model or account minimum be different at the new firm?
Service models often change after an acquisition, sometimes by design. Ask whether you’ll keep a named advisor, move to a team, or be grouped differently based on the size of your account.
It’s also worth asking what the account minimum is at the new firm and whether you’re comfortably above it. Clients below a new threshold usually aren’t asked to leave, but they may be served a different way, and it’s better to know that going in than to notice it later.
9. If I wanted to make a change, what would that involve?
Sticking with your advisor through a transition to new ownership may be the right choice for you, but it’s still good to understand how to end your client relationship and whether or not those terms have changed. Ask what your advisory agreement says about notice and termination. Ask whether there are transfer or account-closing costs. And ask whether anything you hold couldn’t move as-is, like proprietary funds, certain share classes, or positions that would have to be sold first. Knowing the answer doesn’t mean you’ll ever need it. It just means you can make a fully informed choice about what’s right for you.
10. Where can I read about this myself?
Every registered investment adviser files a public document called Form ADV, along with a plain-language summary called Form CRS. Both are free at adviserinfo.sec.gov, and both get amended after a transaction. These forms are also usually required to be posted on a firm’s website, and you can often find them on the footer of the website. Ask what changed, and then have a look yourself.
What a good answer sounds like
You’re not looking for perfect answers. Transitions are complicated, and an honest advisor will tell you plainly that some things are still being sorted out. There’s nothing wrong with that.
What you’re really listening for is specificity. Dates rather than “soon.” Names rather than “the team.” A willingness to follow up in writing. An advisor who works through these questions with you is showing you the same care you hired them for in the first place, and that’s usually the most reassuring thing that can come out of the conversation.
Why we think about this
Foster Group is an independent, multigenerational, internally-owned fiduciary wealth management firm and the firm is built to keep passing that way. We’re not owned by a bank, a private equity firm, or a national consolidator.
We don’t say that as a criticism of anyone who has taken a different path. Firms sell for good reasons, and plenty of clients are well served afterward. We say it because ownership structure is one of the few things about a financial relationship you can actually know in advance, and it’s a question people rarely think to ask.
If a letter has arrived and you’re not sure what it means, we’re glad to talk it through whether or not we ever have an opportunity to serve you as a client of our firm.
