31:["$","$L32",null,{"category":"$33","relatedArticles":[{"id":"cG9zdDoyNzA5MTU=","databaseId":270915,"postId":270915,"author":{"node":{"id":"dXNlcjoz","databaseId":3,"userId":3,"avatar":{"url":"https://secure.gravatar.com/avatar/47938df052bf0a5283bd6b77ab786737?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"SmartAsset employs a team of writers and editors with years of experience in the editorial, news and personal finance industries. Some staff members also hold the Certified Educator in Personal Finance (CEPF®) designation from the Institute for Financial Literacy.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Michael","fullName":"SmartAsset Team","lastName":"Carvin","name":"SmartAsset Team","postCount":{"pageInfo":{"offsetPagination":{"total":1417,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"mcarvin","__typename":"User"},"__typename":"NodeWithAuthorToUserConnectionEdge"},"categories":{"nodes":[{"id":"dGVybTo3OTY5","children":{"nodes":[{"name":"Advisor Basics","slug":"advisor-basics","__typename":"Category"},{"name":"Advisor Fees & Costs","slug":"advisor-fees-and-costs","__typename":"Category"},{"name":"Ask an Advisor","slug":"ask-an-advisor","__typename":"Category"},{"name":"Certifications & Licenses","slug":"certifications-licenses","__typename":"Category"},{"name":"Financial Planning","slug":"financial-planning","__typename":"Category"},{"name":"Market Insights","slug":"market-insights","__typename":"Category"},{"name":"Other","slug":"other-financial-advisor","__typename":"Category"},{"name":"Tax & Legal","slug":"tax-and-legal","__typename":"Category"}],"__typename":"CategoryToCategoryConnection"},"databaseId":7969,"categoryId":7969,"link":"https://smartasset.com/financial-advisor/articles","name":"Financial Advisor","postCount":{"pageInfo":{"offsetPagination":{"total":812,"__typename":"OffsetPaginationPageInfo"},"__typename":"CategoryToPostConnectionPageInfo"},"__typename":"CategoryToPostConnection"},"slug":"financial-advisor","ancestors":null,"parent":null,"__typename":"Category"}],"__typename":"PostToCategoryConnection"},"content":"$34","date":"2024-12-11T13:50:18","excerpt":"

\n","featuredImage":{"id":"cG9zdDoyNzEwMDU=","databaseId":271005,"altText":"What Is an Investment Club and How Could It Work for You?","date":"2024-12-11T13:38:50","fileSize":396720,"mimeType":"image/jpeg","modified":"2024-12-11T13:38:57","sourceUrl":"https://smartasset.com/wp-content/uploads/sites/2/2024/12/iStock-1144861737.jpg","__typename":"MediaItem"},"modified":{"datetime":"2024-12-11","readable":"December 11, 2024"},"multipleBylinesByRole":{"editedBy":{"id":"dXNlcjoxMzY=","databaseId":136,"userId":136,"avatar":{"url":"https://secure.gravatar.com/avatar/1d295f71ad5f26fc505155b8d7e5e2a0?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Jeff is a Writer/Editor for SmartAsset. He's an expert in a variety of personal finance topics, such as investing, banking and retirement. Jeff has received his JD and MBA and has been featured in a number of publications, such as Investopedia, The Street, Forbes, Yahoo! Finance and more. He currently resides in Utah with his wife and five children, where they cheer for the Denver Broncos and make it to the water to sail whenever given the chance. Jeff currently holds the Certified Educator in Personal Finance (CEPF®) designation.","additionalMeta":{"expertise":"Financial Planning, Small Business, Retirement, Banking","__typename":"User_Additionalmeta"},"email":null,"firstName":"Jeff","fullName":"Jeff White, CEPF®","lastName":"White, CEPF®","name":"Jeff White, CEPF®","postCount":{"pageInfo":{"offsetPagination":{"total":16,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"jwhite","__typename":"User"},"reviewedBy":null,"writtenBy":null,"factCheckedBy":null,"secondEditor":null,"hideAuthor":true,"__typename":"Post_Multiplebylinesbyrole"},"adTargetingOverrides":{"fieldGroupName":"adTargetingOverrides","pageGroupNewKey":null,"__typename":"Post_Adtargetingoverrides"},"seo":{"canonical":"https://smartasset.com/financial-advisor/what-is-an-investment-club-and-how-could-it-work-for-you","metaDesc":"An investment club is a group of like-minded individuals that come together to learn more about investing. Here's how it could benefit you.","metaKeywords":"","metaRobotsNofollow":"follow","metaRobotsNoindex":"index","readingTime":6,"title":"What Is an Investment Club and How Could It Work for You?","__typename":"PostTypeSEO"},"slug":"what-is-an-investment-club-and-how-could-it-work-for-you","status":"publish","title":"What Is an Investment Club and How Could It Work for You?","uri":"/financial-advisor/what-is-an-investment-club-and-how-could-it-work-for-you","tags":{"nodes":[{"name":"news-sitemap","__typename":"Tag"}],"__typename":"PostToTagConnection"},"__typename":"Post","adPageGroupOverride":null,"bylines":{"writtenBy":null,"editedBy":{"id":"dXNlcjoxMzY=","databaseId":136,"userId":136,"avatar":"$35","description":"Jeff is a Writer/Editor for SmartAsset. He's an expert in a variety of personal finance topics, such as investing, banking and retirement. Jeff has received his JD and MBA and has been featured in a number of publications, such as Investopedia, The Street, Forbes, Yahoo! Finance and more. He currently resides in Utah with his wife and five children, where they cheer for the Denver Broncos and make it to the water to sail whenever given the chance. Jeff currently holds the Certified Educator in Personal Finance (CEPF®) designation.","additionalMeta":"$36","email":null,"firstName":"Jeff","fullName":"Jeff White, CEPF®","lastName":"White, CEPF®","name":"Jeff White, CEPF®","postCount":"$37","slug":"jeff-white-cepf","__typename":"User"},"reviewedBy":null,"factCheckedBy":null,"secondEditor":null},"category":{"id":"dGVybTo3OTY5","children":"$3a","databaseId":7969,"categoryId":7969,"link":"https://smartasset.com/financial-advisor/articles","name":"Financial Advisor","postCount":812,"slug":"financial-advisor","ancestors":null,"parent":null,"__typename":"Category"},"isModifiedBeforePublished":true,"contentBlocks":["

If you’re interested in learning more about investing or simply gathering with like-minded individuals, you may want to consider joining an investment club. An investment club is a group of individuals who come together to pool their money, knowledge and resources to invest collectively. These clubs offer a collaborative way to learn about investing while exploring financial opportunities as a team. Whether you’re looking to join an existing club or start one of your own, it’s worth understanding how investment clubs work and what benefits they can offer.

","

Whether or not you join an investment club, a financial advisor can help you plan for your long-term goals.

","

What Is an Investment Club?

","

An investment club is a collaborative group of investors. In many clubs, members contribute funds to a shared investment pool and collectively decide how to invest the money. Clubs can vary in size, but they’re generally small groups of individuals with a common interest in growing their wealth. Most clubs focus on long-term investments, such as stocks or real estate, though the specific strategy depends on the members’ shared goals.

","

Investment club meetings typically occur monthly or quarterly and serve as a forum for discussing financial strategies, reviewing portfolio performance and deciding on new investments. Members may take turns researching and presenting investment opportunities, fostering a hands-on learning environment. The club’s decisions are usually democratic, with each member having an equal vote.

","

Benefits of an Investment Club

","

Investment clubs offer beginning investors a supportive way to learn in a collaborative and low-pressure setting. Experienced investors, meanwhile, may find value in expanding their networks and exploring new investment ideas. Joining an investment club can have several benefits for your financial health and investing skills, such as:

","

Shared knowledge: Members bring diverse experiences and perspectives, allowing the group to analyze investments more comprehensively.
Cost sharing: Pooling funds reduces individual costs of large investments and makes transacting more affordable.
Educational opportunities: Clubs provide a platform to learn about market trends, investment strategies and financial management from peers.
Networking: Building connections with like-minded individuals can lead to professional and personal growth.
Accountability: Regular meetings and group discussions encourage members to stay disciplined in their investing habits.

","

How to Find an Investment Club

","

","

Regardless of where you live and whether you’re looking for an online or in-person investment club, there are several places to look. Use the following resources to help you find potential clubs to join.

","

Local community groups: Check community centers or libraries for notices about investment club meetings.
Professional networks: Reach out to colleagues, industry groups or alumni associations for recommendations.
Online forums: Websites like Meetup or Facebook often host groups dedicated to investing in your area.
Financial advisors: Some advisors may know of reputable clubs or even facilitate their own.
Investor organizations: Groups like the National Association of Investors Corporation, also known as BetterInvesting, provide resources for finding or starting clubs.

","

Investment clubs vary widely. Before joining one, consider its investment strategy, member compatibility and level of commitment required.

","

How to Start an Investment Club

","

If you can’t find an investment club that suits your needs, starting one is another option. Forming your investment club can be a rewarding way to build a community of like-minded investors. But it’s important to take the time to organize your club’s structure and goals so you and your members can have a successful investing experience.

","

Here are some steps you can take to get started:

","

Define your goals: Decide on the club’s purpose, investment strategy and risk tolerance.
Recruit members: Look for individuals with shared interests and compatible financial goals.
Establish rules: Create a governing document outlining meeting schedules, member contributions and decision-making processes.
Open a group account: Set up a brokerage account for the club’s pooled funds.
Track performance: Assign roles for managing records, researching investments and evaluating the portfolio.

","

Key Considerations

","

When starting an investment club, there are several legal and financial considerations to keep in mind. These include the following:

","

Taxation: In the U.S., investment clubs are typically treated as partnerships for tax purposes. Each member is responsible for reporting their share of income or losses.
Regulations: Clubs must ensure compliance with the Securities and Exchange Commission (SEC) and any state-specific rules.
Record-keeping: You should maintain accurate records of contributions, transactions and distributions to avoid disputes.
Agreement: Drafting a formal partnership agreement can help clarify roles and expectations.

","

Consulting with a financial advisor or attorney can help ensure your club operates smoothly and complies with relevant regulations.

","

What to Expect From an Investment Club

","

Participating in an investment club requires time and commitment, but it also offers significant rewards. Expect to attend regular meetings, contribute financially and take an active role in discussions and research. The collaborative nature of investment clubs can lead to shared success, but it also involves mutual accountability. Staying engaged and informed can help you make the most of the experience.

","

Bottom Line

","

Investment clubs offer a unique opportunity to grow your wealth, expand your financial knowledge and connect with like-minded individuals. Whether you’re a beginner looking for guidance or a seasoned investor seeking collaboration, an investment club can provide the tools and support you need to achieve your financial goals.

","

Tips for Investing

","$44","

Photo credit: ©iStock.com/RgStudio, ©iStock.com/golero, ©iStock.com/af_istocker

"],"experts":null,"link":"/financial-advisor/what-is-an-investment-club-and-how-could-it-work-for-you","published":{"datetime":"2024-12-11","readable":"December 11, 2024"},"shareInfo":{"title":"What Is an Investment Club and How Could It Work for You?","origin":"/financial-advisor/what-is-an-investment-club-and-how-could-it-work-for-you"},"isNewsArticle":true},{"id":"cG9zdDoyNjUyMzM=","databaseId":265233,"postId":265233,"author":{"node":{"id":"dXNlcjoz","databaseId":3,"userId":3,"avatar":{"url":"https://secure.gravatar.com/avatar/47938df052bf0a5283bd6b77ab786737?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"SmartAsset employs a team of writers and editors with years of experience in the editorial, news and personal finance industries. Some staff members also hold the Certified Educator in Personal Finance (CEPF®) designation from the Institute for Financial Literacy.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Michael","fullName":"SmartAsset Team","lastName":"Carvin","name":"SmartAsset Team","postCount":{"pageInfo":{"offsetPagination":{"total":1417,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"mcarvin","__typename":"User"},"__typename":"NodeWithAuthorToUserConnectionEdge"},"categories":{"nodes":[{"id":"dGVybTo3OTY5","children":{"nodes":[{"name":"Advisor Basics","slug":"advisor-basics","__typename":"Category"},{"name":"Advisor Fees & Costs","slug":"advisor-fees-and-costs","__typename":"Category"},{"name":"Ask an Advisor","slug":"ask-an-advisor","__typename":"Category"},{"name":"Certifications & Licenses","slug":"certifications-licenses","__typename":"Category"},{"name":"Financial Planning","slug":"financial-planning","__typename":"Category"},{"name":"Market Insights","slug":"market-insights","__typename":"Category"},{"name":"Other","slug":"other-financial-advisor","__typename":"Category"},{"name":"Tax & Legal","slug":"tax-and-legal","__typename":"Category"}],"__typename":"CategoryToCategoryConnection"},"databaseId":7969,"categoryId":7969,"link":"https://smartasset.com/financial-advisor/articles","name":"Financial Advisor","postCount":{"pageInfo":{"offsetPagination":{"total":812,"__typename":"OffsetPaginationPageInfo"},"__typename":"CategoryToPostConnectionPageInfo"},"__typename":"CategoryToPostConnection"},"slug":"financial-advisor","ancestors":null,"parent":null,"__typename":"Category"}],"__typename":"PostToCategoryConnection"},"content":"$45","date":"2024-10-15T23:35:05","excerpt":"

\n","featuredImage":{"id":"cG9zdDoyNjUzMDA=","databaseId":265300,"altText":"How Tenancy-at-Will Works in Georgia","date":"2024-10-15T23:34:38","fileSize":237104,"mimeType":"image/jpeg","modified":"2024-10-15T23:34:43","sourceUrl":"https://smartasset.com/wp-content/uploads/sites/2/2024/10/iStock-1495298376.jpg","__typename":"MediaItem"},"modified":{"datetime":"2024-10-15","readable":"October 15, 2024"},"multipleBylinesByRole":{"editedBy":{"id":"dXNlcjoxMzY=","databaseId":136,"userId":136,"avatar":{"url":"https://secure.gravatar.com/avatar/1d295f71ad5f26fc505155b8d7e5e2a0?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Jeff is a Writer/Editor for SmartAsset. He's an expert in a variety of personal finance topics, such as investing, banking and retirement. Jeff has received his JD and MBA and has been featured in a number of publications, such as Investopedia, The Street, Forbes, Yahoo! Finance and more. He currently resides in Utah with his wife and five children, where they cheer for the Denver Broncos and make it to the water to sail whenever given the chance. Jeff currently holds the Certified Educator in Personal Finance (CEPF®) designation.","additionalMeta":{"expertise":"Financial Planning, Small Business, Retirement, Banking","__typename":"User_Additionalmeta"},"email":null,"firstName":"Jeff","fullName":"Jeff White, CEPF®","lastName":"White, CEPF®","name":"Jeff White, CEPF®","postCount":{"pageInfo":{"offsetPagination":{"total":16,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"jwhite","__typename":"User"},"reviewedBy":null,"writtenBy":null,"factCheckedBy":null,"secondEditor":null,"hideAuthor":true,"__typename":"Post_Multiplebylinesbyrole"},"adTargetingOverrides":{"fieldGroupName":"adTargetingOverrides","pageGroupNewKey":null,"__typename":"Post_Adtargetingoverrides"},"seo":{"canonical":"https://smartasset.com/financial-advisor/how-tenancy-at-will-works-in-georgia","metaDesc":"In Georgia, a tenancy-at-will arrangement allows tenants to occupy a property without a formal lease agreement. Here's how it works.","metaKeywords":"","metaRobotsNofollow":"follow","metaRobotsNoindex":"index","readingTime":6,"title":"How Tenancy-at-Will Works in Georgia","__typename":"PostTypeSEO"},"slug":"how-tenancy-at-will-works-in-georgia","status":"publish","title":"How Tenancy-at-Will Works in Georgia","uri":"/financial-advisor/how-tenancy-at-will-works-in-georgia","tags":{"nodes":[{"name":"news-sitemap","__typename":"Tag"}],"__typename":"PostToTagConnection"},"__typename":"Post","adPageGroupOverride":null,"bylines":{"writtenBy":null,"editedBy":{"id":"dXNlcjoxMzY=","databaseId":136,"userId":136,"avatar":"$46","description":"Jeff is a Writer/Editor for SmartAsset. He's an expert in a variety of personal finance topics, such as investing, banking and retirement. Jeff has received his JD and MBA and has been featured in a number of publications, such as Investopedia, The Street, Forbes, Yahoo! Finance and more. He currently resides in Utah with his wife and five children, where they cheer for the Denver Broncos and make it to the water to sail whenever given the chance. Jeff currently holds the Certified Educator in Personal Finance (CEPF®) designation.","additionalMeta":"$47","email":null,"firstName":"Jeff","fullName":"Jeff White, CEPF®","lastName":"White, CEPF®","name":"Jeff White, CEPF®","postCount":"$48","slug":"jeff-white-cepf","__typename":"User"},"reviewedBy":null,"factCheckedBy":null,"secondEditor":null},"category":{"id":"dGVybTo3OTY5","children":"$4b","databaseId":7969,"categoryId":7969,"link":"https://smartasset.com/financial-advisor/articles","name":"Financial Advisor","postCount":812,"slug":"financial-advisor","ancestors":null,"parent":null,"__typename":"Category"},"isModifiedBeforePublished":true,"contentBlocks":["

In Georgia, a tenancy-at-will arrangement allows tenants to occupy a property without a formal lease agreement. This type of agreement, which can be verbal or written, provides flexibility, but it comes with certain risks. For example, either party can end the arrangement with proper notice. Tenancy-at-will is commonly used for month-to-month rental agreements, which can be convenient for tenants who need temporary housing or landlords who prefer not to commit to long-term leases. However, tenants and landlords in Georgia should be aware of the specific rules, rights and termination requirements associated with this type of tenancy, as they differ from traditional lease agreements.

","

Interested in investing in real estate? A financial advisor can help you determine what kind of investment may be best for your situation and goals.

","

What Is Tenancy-at-Will?

","

Tenancy-at-will in Georgia refers to an agreement where a tenant occupies a property with the landlord’s permission but without a formal lease or set rental period. This type of arrangement provides both the tenant and landlord with a degree of flexibility, as it doesn’t tie either party to a long-term commitment. Instead, the tenant can remain on the property until either the landlord or tenant decides to end the tenancy.

","

Typically, the terms of the tenancy, including rent and other conditions, are agreed upon but not formalized in a written lease. This arrangement may suit tenants who need short-term housing or landlords looking for flexibility in renting out their properties and earning rental income.

","

Under Georgia law, tenancy-at-will requires that both the landlord and tenant adhere to specific notice periods for termination. This helps to provide some structure and stability, even without a formal lease.

","

While tenancy-at-will may be convenient, both parties should understand their rights and obligations to avoid misunderstandings. For instance, tenants in a tenancy-at-will arrangement have similar protections under state law as tenants with formal leases, but landlords retain the right to terminate the arrangement more easily than with a standard lease.

","

How Does Tenancy-at-Will Work in Georgia?

","

","

In Georgia, tenancy-at-will operates under a few simple rules and provides both parties with flexibility and straightforward termination processes. Here’s how it typically works:

","

No fixed term: Since there’s no formal lease, the arrangement continues until either the landlord or tenant decides to end it.
Notice requirements: Georgia law specifies that landlords must provide 60 days’ notice, while tenants are required to give 30 days’ notice if they plan to move out.
Rent payments: The landlord and tenant should discuss terms of rent, including the amount and due date, even if not formalized in writing. Tenants are responsible for making timely payments, and failure to do so may result in termination of the agreement.
Termination: Either party can terminate the tenancy by providing the required notice. However, in cases of non-payment or breach of terms, landlords can initiate the eviction process sooner.

","

Timeframes for Termination

","

Termination notice requirements under tenancy-at-will in Georgia are as follows:

","

Landlords must give 60 days’ notice if they wish to terminate the tenancy.
Tenants must provide 30 days’ notice if they plan to vacate the property.
In cases of non-payment or other breaches, landlords can pursue immediate eviction under Georgia eviction laws, subject to court approval.

","

These timeframes allow tenants and landlords to prepare for transitions, making sure neither party is caught off guard.

","

Tenant-at-Will Rights in Georgia

","

Tenants-at-will in Georgia have certain rights under state law, similar to tenants with formal leases. These rights are designed to protect tenants from unfair treatment and ensure a safe living environment:

","

Right to notice: Tenants must receive 60 days notice from the landlord before termination, except in cases of non-payment or other breaches.
Habitability: Landlords are required to maintain the property in a safe and livable condition. This includes basic necessities such as working plumbing, heating and electricity.
Privacy: Although there is no formal lease, tenants still have a right to privacy. Landlords should provide reasonable notice before entering the property, except in emergencies.
Freedom from discrimination: Tenants-at-will are protected under Georgia’s fair housing laws, which prohibit discrimination based on race, color, religion, sex, national origin, disability or familial status.

","

Landlord Rights in Georgia

","

Landlords with tenancy-at-will arrangements in Georgia also have specific rights that allow them to manage their properties effectively. These rights include:

","

Right to terminate: Landlords can terminate a tenancy-at-will with 60 days’ notice, providing them with flexibility in managing their rental properties.
Eviction for non-payment: If a tenant fails to pay rent, the landlord has the right to initiate eviction proceedings. In such cases, the landlord doesn’t need to adhere to the 60-day notice period.
Property access: Landlords have the right to enter the property, although they should provide reasonable notice to tenants. In emergencies, landlords may enter without notice.
Setting terms: While tenancy-at-will agreements are often informal, landlords still have the right to set terms around rent payments, property upkeep and tenant behavior, as long as they comply with Georgia’s tenant rights laws.

","

Bottom Line

","

","

Tenancy-at-will offers both flexibility and risks for landlords and tenants in Georgia. By understanding the rights and responsibilities associated with this arrangement, both parties can maintain a fair and respectful relationship. Tenancy-at-will may be ideal for short-term housing solutions or landlords who prefer not to commit to long-term leases, but it’s essential to follow Georgia’s specific legal requirements to ensure a smooth experience. Open communication, written agreements and adherence to notice periods can help make tenancy-at-will a successful arrangement for both landlords and tenants in Georgia.

","

Tips for Investing in Real Estate

","$55","

Photo credit: ©iStock.com/shapecharge, ©iStock.com/VioletaStoimenova, ©iStock.com/nd3000

"],"experts":null,"link":"/financial-advisor/how-tenancy-at-will-works-in-georgia","published":{"datetime":"2024-10-15","readable":"October 15, 2024"},"shareInfo":{"title":"How Tenancy-at-Will Works in Georgia","origin":"/financial-advisor/how-tenancy-at-will-works-in-georgia"},"isNewsArticle":true},{"id":"cG9zdDoyNjkxMDk=","databaseId":269109,"postId":269109,"author":{"node":{"id":"dXNlcjoz","databaseId":3,"userId":3,"avatar":{"url":"https://secure.gravatar.com/avatar/47938df052bf0a5283bd6b77ab786737?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"SmartAsset employs a team of writers and editors with years of experience in the editorial, news and personal finance industries. Some staff members also hold the Certified Educator in Personal Finance (CEPF®) designation from the Institute for Financial Literacy.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Michael","fullName":"SmartAsset Team","lastName":"Carvin","name":"SmartAsset Team","postCount":{"pageInfo":{"offsetPagination":{"total":1417,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"mcarvin","__typename":"User"},"__typename":"NodeWithAuthorToUserConnectionEdge"},"categories":{"nodes":[{"id":"dGVybToxOTQ3MA==","children":{"nodes":[],"__typename":"CategoryToCategoryConnection"},"databaseId":19470,"categoryId":19470,"link":"https://smartasset.com/financial-planning/articles","name":"Financial Planning","postCount":{"pageInfo":{"offsetPagination":{"total":307,"__typename":"OffsetPaginationPageInfo"},"__typename":"CategoryToPostConnectionPageInfo"},"__typename":"CategoryToPostConnection"},"slug":"financial-planning","ancestors":{"nodes":[{"name":"Financial Advisor","slug":"financial-advisor","__typename":"Category"}],"__typename":"CategoryToAncestorsCategoryConnection"},"parent":{"node":{"name":"Financial Advisor","id":"dGVybTo3OTY5","slug":"financial-advisor","__typename":"Category"},"__typename":"CategoryToParentCategoryConnectionEdge"},"__typename":"Category"}],"__typename":"PostToCategoryConnection"},"content":"$56","date":"2024-11-20T16:24:01","excerpt":"

“Paying yourself first” is a simple strategy to prioritize savings and investments by setting aside a portion of your income before covering other expenses. This approach helps you consistently work toward financial goals like retirement, emergency savings, or building wealth, while encouraging disciplined saving habits and reducing impulsive spending. A financial advisor can help you […]

\n","featuredImage":{"id":"cG9zdDoyNjkxMTM=","databaseId":269113,"altText":"A woman reviewing a strategy that could help her pay herself first.","date":"2024-11-20T15:08:40","fileSize":165972,"mimeType":"image/jpeg","modified":"2024-11-20T16:23:27","sourceUrl":"https://smartasset.com/wp-content/uploads/sites/2/2024/11/iStock-1401269015-1.jpg","__typename":"MediaItem"},"modified":{"datetime":"2024-11-20","readable":"November 20, 2024"},"multipleBylinesByRole":{"editedBy":{"id":"dXNlcjoxMTc=","databaseId":117,"userId":117,"avatar":{"url":"https://secure.gravatar.com/avatar/9fffe2eb35204e151b68731435d247c5?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Arturo Conde is a senior editor at SmartAsset. He has a master’s from the Graduate School of Journalism at Columbia University and a bachelor’s from the College of Arts and Science at New York University. As a certified educator in personal finance, he edits and writes content that focuses on retirement, investments, home buying and other financial topics.\r\n\r\nArturo is a bilingual native in English and Spanish, and also writes as a freelance journalist for NBC News, among other publications. His articles have been published in Fusion, Univision, City Limits, the NACLA Report on the Americas and WhoWhatWhy, as well as La Opinión A Coruña newspaper in Spain.","additionalMeta":{"expertise":"Financial Planning, Retirement Planning, Investment Planning, Tax Planning","__typename":"User_Additionalmeta"},"email":null,"firstName":"Arturo","fullName":"Arturo Conde, CEPF®","lastName":"Conde, CEPF®","name":"Arturo Conde, CEPF®","postCount":{"pageInfo":{"offsetPagination":{"total":38,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"aconde","__typename":"User"},"reviewedBy":null,"writtenBy":{"id":"dXNlcjoz","databaseId":3,"userId":3,"avatar":{"url":"https://secure.gravatar.com/avatar/47938df052bf0a5283bd6b77ab786737?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"SmartAsset employs a team of writers and editors with years of experience in the editorial, news and personal finance industries. Some staff members also hold the Certified Educator in Personal Finance (CEPF®) designation from the Institute for Financial Literacy.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Michael","fullName":"SmartAsset Team","lastName":"Carvin","name":"SmartAsset Team","postCount":{"pageInfo":{"offsetPagination":{"total":1417,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"mcarvin","__typename":"User"},"factCheckedBy":null,"secondEditor":null,"hideAuthor":true,"__typename":"Post_Multiplebylinesbyrole"},"adTargetingOverrides":{"fieldGroupName":"adTargetingOverrides","pageGroupNewKey":null,"__typename":"Post_Adtargetingoverrides"},"seo":{"canonical":"https://smartasset.com/financial-advisor/ways-to-pay-yourself-first","metaDesc":"\"Pay yourself first\" by automatically saving or investing a portion of your income before covering other expenses.","metaKeywords":"","metaRobotsNofollow":"follow","metaRobotsNoindex":"index","readingTime":5,"title":"5 Ways to Pay Yourself First","__typename":"PostTypeSEO"},"slug":"ways-to-pay-yourself-first","status":"publish","title":"5 Ways to Pay Yourself First","uri":"/financial-advisor/ways-to-pay-yourself-first","tags":{"nodes":[{"name":"news-sitemap","__typename":"Tag"}],"__typename":"PostToTagConnection"},"__typename":"Post","adPageGroupOverride":null,"bylines":{"writtenBy":null,"editedBy":{"id":"dXNlcjoxMTc=","databaseId":117,"userId":117,"avatar":"$57","description":"Arturo Conde is a senior editor at SmartAsset. He has a master’s from the Graduate School of Journalism at Columbia University and a bachelor’s from the College of Arts and Science at New York University. As a certified educator in personal finance, he edits and writes content that focuses on retirement, investments, home buying and other financial topics.\r\n\r\nArturo is a bilingual native in English and Spanish, and also writes as a freelance journalist for NBC News, among other publications. His articles have been published in Fusion, Univision, City Limits, the NACLA Report on the Americas and WhoWhatWhy, as well as La Opinión A Coruña newspaper in Spain.","additionalMeta":"$58","email":null,"firstName":"Arturo","fullName":"Arturo Conde, CEPF®","lastName":"Conde, CEPF®","name":"Arturo Conde, CEPF®","postCount":"$59","slug":"arturo-conde-cepf","__typename":"User"},"reviewedBy":null,"factCheckedBy":null,"secondEditor":null},"category":{"id":"dGVybToxOTQ3MA==","children":"$5c","databaseId":19470,"categoryId":19470,"link":"https://smartasset.com/financial-planning/articles","name":"Financial Planning","postCount":307,"slug":"financial-planning","ancestors":"$5e","parent":"$61","__typename":"Category"},"isModifiedBeforePublished":true,"contentBlocks":["

","

1. Create a Savings Strategy

","

Creating a savings strategy is key to achieving financial stability and meeting your short- and long-term goals. Start by reviewing your income, expenses and current savings to determine how much you can set aside each month.

","

Once you have a clear picture of your finances, prioritize your savings goals. Whether you’re saving for an emergency fund, a down payment on a house, or retirement, having specific targets will keep you motivated and focused.

","

Consider automating your savings by setting up automatic transfers from your checking account to your savings account. This “pay yourself first” approach ensures that saving becomes a non-negotiable part of your financial routine and can help you avoid the temptation to spend money that should be saved.

","

2. Contribute to Your Employer’s 401(k) Plan

","

Contributing to your employer’s 401(k) plan is another common strategy for paying yourself first and securing your financial future. A traditional 401(k) plan allows you to set aside a portion of your pre-tax income, which not only reduces your taxable income but also helps your retirement savings grow over time.

","

Many employers offer matching contributions, which can significantly boost your retirement fund. By taking full advantage of these matching contributions, you essentially receive free money that compounds over the years, enhancing your financial security in retirement.

","

To make the most of your 401(k) plan, consider increasing your contribution rate whenever possible. Even small increases can have a substantial impact over the long term due to compound interest.

","

It’s also important to review your investment options within the plan so that they align with your retirement goals and risk tolerance. Regularly monitoring and adjusting your contributions and investment choices can help you stay on track to meet your retirement objectives.

","

3. Automate Your Savings Each Month

","

Automating your savings each month is an effective strategy to help you set money aside for your future. Many banks and financial institutions offer options that make it easy to schedule automatic transfers from your checking account to a savings or investment account, allowing you to prioritize your savings goals with minimum effort.

","

One key benefit of automating your savings is taking advantage of compound interest. Over time, this can allow even small, regular contributions to grow substantially, especially if your savings are directed into a high-yield savings account or investment vehicle.

","

4. Contribute to a Cash Value Life Insurance Plan

","

Cash value life insurance combines life insurance coverage with a savings feature. Unlike term life insurance, which covers a set period, this provides lifelong protection and allows cash value to grow over time. The cash value grows tax-deferred, so taxes are not owed on the gains as they accumulate.

","

Policyholders can access the cash value of a life insurance policy through loans or withdrawals, offering flexibility for needs like supplementing retirement income or paying for a child’s education. Contributing to such a policy provides financial security for beneficiaries while building a personal asset. However, avoid costly additional features you may not need, and remember that earnings from withdrawals are taxable.

","

5. Increase Your Savings Not Your Lifestyle

","

Higher income can lead to higher spending. As a result, this type of lifestyle inflation can eat into your savings, and slow down your financial growth and wealth building. One common strategy to continue paying yourself first is to redirect raises or bonuses into savings or investments. This can help you develop strong saving habits to manage unexpected expenses.

","

Borrowing from an earlier strategy, you can avoid lifestyle inflation by automating your savings. Set up automatic transfers from your checking to your savings or investment accounts each month, making saving a regular part of your routine. Treating savings like a bill helps you build wealth over time and creates a strong financial cushion for the future.

","

Bottom Line

","

","

“Pay yourself first” by automatically saving or investing a portion of your income before covering other expenses. This strategy can help you prioritize your financial goals, build an emergency fund and reach different milestones, including buying a home or retiring comfortably.

","

Financial Planning Tips

","$63","

"],"experts":null,"link":"/financial-planning/ways-to-pay-yourself-first","published":{"datetime":"2024-11-20","readable":"November 20, 2024"},"shareInfo":{"title":"5 Ways to Pay Yourself First","origin":"/financial-advisor/ways-to-pay-yourself-first"},"isNewsArticle":true},{"id":"cG9zdDoyNjI3NTg=","databaseId":262758,"postId":262758,"author":{"node":{"id":"dXNlcjoz","databaseId":3,"userId":3,"avatar":{"url":"https://secure.gravatar.com/avatar/47938df052bf0a5283bd6b77ab786737?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"SmartAsset employs a team of writers and editors with years of experience in the editorial, news and personal finance industries. Some staff members also hold the Certified Educator in Personal Finance (CEPF®) designation from the Institute for Financial Literacy.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Michael","fullName":"SmartAsset Team","lastName":"Carvin","name":"SmartAsset Team","postCount":{"pageInfo":{"offsetPagination":{"total":1417,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"mcarvin","__typename":"User"},"__typename":"NodeWithAuthorToUserConnectionEdge"},"categories":{"nodes":[{"id":"dGVybTo3OTY5","children":{"nodes":[{"name":"Advisor Basics","slug":"advisor-basics","__typename":"Category"},{"name":"Advisor Fees & Costs","slug":"advisor-fees-and-costs","__typename":"Category"},{"name":"Ask an Advisor","slug":"ask-an-advisor","__typename":"Category"},{"name":"Certifications & Licenses","slug":"certifications-licenses","__typename":"Category"},{"name":"Financial Planning","slug":"financial-planning","__typename":"Category"},{"name":"Market Insights","slug":"market-insights","__typename":"Category"},{"name":"Other","slug":"other-financial-advisor","__typename":"Category"},{"name":"Tax & Legal","slug":"tax-and-legal","__typename":"Category"}],"__typename":"CategoryToCategoryConnection"},"databaseId":7969,"categoryId":7969,"link":"https://smartasset.com/financial-advisor/articles","name":"Financial Advisor","postCount":{"pageInfo":{"offsetPagination":{"total":812,"__typename":"OffsetPaginationPageInfo"},"__typename":"CategoryToPostConnectionPageInfo"},"__typename":"CategoryToPostConnection"},"slug":"financial-advisor","ancestors":null,"parent":null,"__typename":"Category"}],"__typename":"PostToCategoryConnection"},"content":"$64","date":"2024-09-20T16:13:50","excerpt":"

Switching financial advisors can come with tax implications that investors should be aware of. For one, the transfer of assets between accounts may trigger taxable events, particularly if investments are sold to facilitate the transfer. Additionally, fees associated with the switch—such as exit fees or early withdrawal penalties—could potentially have tax consequences. Investors should also […]

\n","featuredImage":{"id":"cG9zdDoyNjI3NjI=","databaseId":262762,"altText":"A client meeting with a new financial advisor.","date":"2024-09-20T16:00:04","fileSize":210485,"mimeType":"image/jpeg","modified":"2024-09-20T16:00:30","sourceUrl":"https://smartasset.com/wp-content/uploads/sites/2/2024/09/iStock-1419530650-1.jpg","__typename":"MediaItem"},"modified":{"datetime":"2024-9-20","readable":"September 20, 2024"},"multipleBylinesByRole":{"editedBy":{"id":"dXNlcjo3Ng==","databaseId":76,"userId":76,"avatar":{"url":"https://secure.gravatar.com/avatar/ff1d12e3cebfaa1fe2b25aef26174d63?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Becca Stanek is a graduate of DePauw University. Becca is an experienced writer/editor who serves as a retirement expert for SmartAsset. She's passionate about helping people understand the sometimes daunting ins and outs of personal finance. Becca is a member of the Society for Advancing Business Editing and Writing, and her work has appeared in Time, The Week, Lending Tree and the Mic. Becca grew up in the Midwest and now lives in New York.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Becca","fullName":"Becca Stanek","lastName":"Stanek","name":"Becca Stanek","postCount":{"pageInfo":{"offsetPagination":{"total":19,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"bstanek","__typename":"User"},"reviewedBy":{"id":"dXNlcjoxNDQ=","databaseId":144,"userId":144,"avatar":{"url":"https://secure.gravatar.com/avatar/e1f3d3a0e571088b1ba1f56a767f73d3?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Brandon is a Certified Financial Planner™ (CFP®), Retirement Income Certified Professional (RICP) and Enrolled Agent (EA) with more than 10 years of experience as a financial professional. He runs his own independent financial planning firm called Belonging Wealth Management, where he helps clients plan out their retirement distributions, minimize taxes, build financial plans and more. He also holds a PhD in Finance from Hampton University, and spent years as an Assistant Professor of Finance at both Louisiana College and East Texas Baptist University.\r\n\r\nBrandon's areas of expertise include financial planning, retirement planning, taxes, Social Security, investing, annuities, general personal finance and more. His quotes have appeared in publications like Forbes, U.S. News and World Report, Business Insider and more.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Brandon","fullName":"Brandon Renfro, CFP®, RICP, EA","lastName":"Renfro, CFP®, RICP, EA","name":"Brandon Renfro, CFP®, RICP, EA","postCount":{"pageInfo":{"offsetPagination":{"total":92,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"brenfro","__typename":"User"},"writtenBy":{"id":"dXNlcjoz","databaseId":3,"userId":3,"avatar":{"url":"https://secure.gravatar.com/avatar/47938df052bf0a5283bd6b77ab786737?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"SmartAsset employs a team of writers and editors with years of experience in the editorial, news and personal finance industries. Some staff members also hold the Certified Educator in Personal Finance (CEPF®) designation from the Institute for Financial Literacy.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Michael","fullName":"SmartAsset Team","lastName":"Carvin","name":"SmartAsset Team","postCount":{"pageInfo":{"offsetPagination":{"total":1417,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"mcarvin","__typename":"User"},"factCheckedBy":null,"secondEditor":{"id":"dXNlcjoxMTc=","databaseId":117,"userId":117,"avatar":{"url":"https://secure.gravatar.com/avatar/9fffe2eb35204e151b68731435d247c5?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Arturo Conde is a senior editor at SmartAsset. He has a master’s from the Graduate School of Journalism at Columbia University and a bachelor’s from the College of Arts and Science at New York University. As a certified educator in personal finance, he edits and writes content that focuses on retirement, investments, home buying and other financial topics.\r\n\r\nArturo is a bilingual native in English and Spanish, and also writes as a freelance journalist for NBC News, among other publications. His articles have been published in Fusion, Univision, City Limits, the NACLA Report on the Americas and WhoWhatWhy, as well as La Opinión A Coruña newspaper in Spain.","additionalMeta":{"expertise":"Financial Planning, Retirement Planning, Investment Planning, Tax Planning","__typename":"User_Additionalmeta"},"email":null,"firstName":"Arturo","fullName":"Arturo Conde, CEPF®","lastName":"Conde, CEPF®","name":"Arturo Conde, CEPF®","postCount":{"pageInfo":{"offsetPagination":{"total":38,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"aconde","__typename":"User"},"hideAuthor":true,"__typename":"Post_Multiplebylinesbyrole"},"adTargetingOverrides":{"fieldGroupName":"adTargetingOverrides","pageGroupNewKey":null,"__typename":"Post_Adtargetingoverrides"},"seo":{"canonical":"https://smartasset.com/financial-advisor/tax-implications-of-switching-financial-advisors","metaDesc":"Switching financial advisors can be a smooth process, but it’s important to know about tax implications, depending on how assets are handled.","metaKeywords":"","metaRobotsNofollow":"follow","metaRobotsNoindex":"index","readingTime":6,"title":"What Are the Tax Implications of Switching Financial Advisors?","__typename":"PostTypeSEO"},"slug":"tax-implications-of-switching-financial-advisors","status":"publish","title":"What Are the Tax Implications of Switching Financial Advisors?","uri":"/financial-advisor/tax-implications-of-switching-financial-advisors","tags":{"nodes":[{"name":"news-sitemap","__typename":"Tag"}],"__typename":"PostToTagConnection"},"__typename":"Post","adPageGroupOverride":null,"bylines":{"writtenBy":null,"editedBy":{"id":"dXNlcjo3Ng==","databaseId":76,"userId":76,"avatar":"$65","description":"Becca Stanek is a graduate of DePauw University. Becca is an experienced writer/editor who serves as a retirement expert for SmartAsset. She's passionate about helping people understand the sometimes daunting ins and outs of personal finance. Becca is a member of the Society for Advancing Business Editing and Writing, and her work has appeared in Time, The Week, Lending Tree and the Mic. Becca grew up in the Midwest and now lives in New York.","additionalMeta":"$66","email":null,"firstName":"Becca","fullName":"Becca Stanek","lastName":"Stanek","name":"Becca Stanek","postCount":"$67","slug":"becca-stanek","__typename":"User"},"reviewedBy":{"id":"dXNlcjoxNDQ=","databaseId":144,"userId":144,"avatar":"$6a","description":"Brandon is a Certified Financial Planner™ (CFP®), Retirement Income Certified Professional (RICP) and Enrolled Agent (EA) with more than 10 years of experience as a financial professional. He runs his own independent financial planning firm called Belonging Wealth Management, where he helps clients plan out their retirement distributions, minimize taxes, build financial plans and more. He also holds a PhD in Finance from Hampton University, and spent years as an Assistant Professor of Finance at both Louisiana College and East Texas Baptist University.\r\n\r\nBrandon's areas of expertise include financial planning, retirement planning, taxes, Social Security, investing, annuities, general personal finance and more. His quotes have appeared in publications like Forbes, U.S. News and World Report, Business Insider and more.","additionalMeta":"$6b","email":null,"firstName":"Brandon","fullName":"Brandon Renfro, CFP®, RICP, EA","lastName":"Renfro, CFP®, RICP, EA","name":"Brandon Renfro, CFP®, RICP, EA","postCount":"$6c","slug":"brandon-renfro-cfp-ricp-ea","__typename":"User"},"factCheckedBy":null,"secondEditor":{"id":"dXNlcjoxMTc=","databaseId":117,"userId":117,"avatar":"$6f","description":"Arturo Conde is a senior editor at SmartAsset. He has a master’s from the Graduate School of Journalism at Columbia University and a bachelor’s from the College of Arts and Science at New York University. As a certified educator in personal finance, he edits and writes content that focuses on retirement, investments, home buying and other financial topics.\r\n\r\nArturo is a bilingual native in English and Spanish, and also writes as a freelance journalist for NBC News, among other publications. His articles have been published in Fusion, Univision, City Limits, the NACLA Report on the Americas and WhoWhatWhy, as well as La Opinión A Coruña newspaper in Spain.","additionalMeta":"$70","email":null,"firstName":"Arturo","fullName":"Arturo Conde, CEPF®","lastName":"Conde, CEPF®","name":"Arturo Conde, CEPF®","postCount":"$71","slug":"arturo-conde-cepf","__typename":"User"}},"category":{"id":"dGVybTo3OTY5","children":"$74","databaseId":7969,"categoryId":7969,"link":"https://smartasset.com/financial-advisor/articles","name":"Financial Advisor","postCount":812,"slug":"financial-advisor","ancestors":null,"parent":null,"__typename":"Category"},"isModifiedBeforePublished":true,"contentBlocks":["

","

Do You Owe Taxes When You Switch Advisors?

","

Simply changing from one financial advisor to another does not, on its own, result in any tax liabilities.

","

The process of transferring your accounts or assets to a new advisor can typically be done without creating a taxable event, as long as no assets are sold in the process.

","

Most financial institutions offer what’s called an “in-kind transfer,” where your investments are moved directly from one firm to another without being sold or converted into cash. This type of transfer allows you to avoid taxable events.

","

That said, taxes may arise depending on how the transition is handled—though the act of switching advisors itself doesn’t inherently create a tax obligation. Rather, it’s the handling of your assets during the switch that could make a difference in your tax situation.

","

When Changing Advisors Triggers a Tax Bill

","

As mentioned, changing financial advisors can trigger a tax bill depending on how your assets are managed during the transition. One of the primary ways this happens is if your investments are sold as part of the switch.

","

For example, if your previous advisor held investments that your new advisor chooses to sell, those sales can create taxable events. If the investments have appreciated in value, you may face capital gains taxes. Long-term capital gains (for assets held more than a year) are taxed at a lower rate, while short-term capital gains (for assets held less than a year) are taxed as ordinary income, which can be a higher rate.

","

Another tax scenario occurs if you have retirement accounts, like a 401(k) or an IRA. While transferring these accounts between advisors usually doesn’t incur taxes, withdrawing funds as part of the switch can lead to income taxes, and potentially early withdrawal penalties if you are under the age of 59 ½.

","

Other Fees You May Incur for Switching Advisors

","

Beyond taxes, a variety of fees may arise when you switch advisors depending on your current investments and the terms of your accounts. While these fees can vary, understanding the potential costs upfront can help you avoid unexpected expenses during the transition.

","

Common fees include account closure fees, which financial institutions may charge for transferring your accounts to another firm. Additionally, some investments, like mutual funds, may have redemption fees if sold within a certain time frame.

","

Further, if your new advisor recommends selling certain holdings, you could also incur trading commissions or brokerage fees. There also may be transfer fees for moving assets between firms, especially if a direct or in-kind transfer isn’t possible.

","

How to Avoid Taxes When Switching Advisors

","

There are strategies to minimize or avoid tax liabilities when switching advisors. Below are four common tips you can take to help reduce the tax impact when making a switch:

","$7e","

Examining Tax Outcomes

","

","

Let’s look at two hypothetical investors, John and Michelle, who both decide to switch financial advisors but experience different tax outcomes based on how their transitions are handled.

","

Scenario #1: An investor has a taxable brokerage account with several appreciated stocks that they held for less than a year. Their new advisor recommends restructuring their portfolio by selling some of these stocks to align with a more balanced strategy.

","

The tax outcome: As a result, the investor triggers short-term capital gains taxes, which are taxed at their ordinary income rate. Since the investor is in a higher tax bracket, their tax bill is substantial. Additionally, because they sold the stocks before they became long-term holdings, they missed out on the lower tax rate applied to long-term capital gains.

","

Scenario #2: Another investor, on the other hand, also has a taxable account but chooses to move their investments via an in-kind transfer, meaning that their assets are transferred directly to their new advisor without selling them. The investor’s new advisor decides to keep their portfolio intact initially and gradually adjusts it over time, taking advantage of tax-loss harvesting by selling underperforming assets to offset gains.

","

The tax outcome: The second investor avoids immediate taxable events during the transfer and limits their future tax liabilities by managing capital gains more strategically.

","

Bottom Line

","

","

Switching financial advisors can be a smooth process, but it’s important to know about the potential tax implications that may arise, depending on how your assets are handled. While switching advisors doesn’t automatically result in taxes, certain actions—like selling investments or making early withdrawals—can trigger tax liabilities. Careful planning and working closely with your new advisor could help you keep your financial goals on track during the transition.

","

Tips for Finding a Financial Advisor

","$7f","

"],"experts":null,"link":"/financial-advisor/tax-implications-of-switching-financial-advisors","published":{"datetime":"2024-9-20","readable":"September 20, 2024"},"shareInfo":{"title":"What Are the Tax Implications of Switching Financial Advisors?","origin":"/financial-advisor/tax-implications-of-switching-financial-advisors"},"isNewsArticle":true}]}]