Advisory firms change hands all the time now. Founders retire, private equity buys in, and national firms buy local practices to grow.
For the client, it usually shows up as one letter, often written to sound like nothing happened. Sometimes very little does. Sometimes the fees, the investments and the people all drift over the next two years. The letter is the moment you get a say.
What the letter actually is
It’s a consent request, even if it doesn’t sound like one. Under the Investment Advisers Act, an advisory contract can’t be assigned without the client’s consent, and a change in control of the firm counts as an assignment.
So the new owners need your agreement to keep managing your money under your existing contract.
Most firms use what’s called negative consent: they send notice, give you a window, often 30 to 60 days, and if you don’t object, you’ve agreed. Some contracts require you to sign. Either way, the date in that letter matters. After it passes, the new firm is your adviser unless you take action to leave.
The firm will also update its Form ADV, the public filing that lists who owns it, who controls it, how it’s paid and what conflicts it has. The new owner’s Form ADV and Form CRS are the most useful documents you can read right now.
What can change, and when it usually shows up
| What | What to look for | When it tends to show up |
|---|---|---|
| Who owns the firm | A larger firm, often backed by private equity, now controls decisions | Day one |
| Your advisor | Whether they signed a long-term agreement to stay, and what happens to your account if they leave | Often 1 to 3 years later |
| Fees | A new fee schedule, new platform or program fees, or fees on accounts that were free before | At contract renewal or platform moves |
| Investments | A move to the new firm’s model portfolios or in-house strategies | Within the first year or two |
| Custody and paperwork | A new custodian, new account numbers, new forms to sign | During integration |
| Service | A new service team, call center or minimum account size | During integration |
None of these changes is automatically bad. A bigger firm can bring more resources, specialists and technology. The point is to know which of these are coming before you’ve agreed to them, not after.
Questions to ask, in writing
- Who owns the firm now, and is a private equity firm involved? Ask for the new Form ADV Part 2A and Form CRS.
- Is my advisor staying? Did they sign an agreement, and for how long? Who takes over my account if they leave?
- Will my total annual cost change, in dollars, including fund expenses and any new platform or program fees?
- Will my investments be moved into the new firm’s models or proprietary products?
- Will my accounts move to a new custodian, and will that trigger any taxes or costs?
- Is anyone at the firm now paid more for recommending certain products, insurance or annuities?
- What do I have to sign, and what happens if I don’t?
A good firm answers all of these plainly. If the answers are vague, or arrive only after the consent deadline, that’s an answer too.
This is happening in Rochester, too
National firms and private-equity-backed buyers have been buying independent advisory practices across the country, including in Rochester and Western New York.
Many owners of those practices are reaching retirement age, and a sale is how they exit. Clients of any firm that changes hands face the same questions, whether the firm was bought, merged, or the advisor you know is retiring.
None of this means you have to leave. It means you get to decide, on your schedule, with clear answers in writing.
Your three options
| Option | What it means | When it fits |
|---|---|---|
| Stay | Do nothing, or sign the consent. The new firm becomes your adviser. | Your advisor is staying, costs are clear, and the answers above satisfied you |
| Stay, with conditions | Consent, but get written answers and set a date to review cost and service | You’re mostly satisfied but want to watch the integration |
| Move | Open accounts with a new adviser and transfer the assets in kind | Your advisor is leaving, costs are rising, or you no longer know who is responsible for your money |
If you move, move the holdings, not cash. Most investments can transfer in kind between custodians without being sold, which avoids an unplanned tax bill. Check for surrender charges on annuities and anything held in proprietary funds before you start.
How Morrowgate helps. Greg reviews the consent letter, the new firm’s Form ADV and your current statements, and tells you plainly what’s changing and what it costs. If staying is the right answer, he’ll say so. If you move, accounts are held in your name at Fidelity, with Schwab available, and fees are explained in writing before you decide.
Questions people ask
Do I have to sign the consent letter?
It depends on your contract. Many firms use negative consent, where doing nothing counts as agreeing once the deadline passes. Others need a signature. The letter should say which applies.
Will I owe taxes if I leave?
Not usually if you transfer holdings in kind. Selling investments in a taxable account to move cash can create capital gains. Annuities and some proprietary funds may have their own costs.
Does an acquisition mean fees will go up?
Not necessarily. But fees, platforms and investment programs often change during integration. Ask for your total annual cost in dollars, before and after.
My advisor is staying. Isn’t that enough?
It helps, but ask for how long. Advisors who sell often agree to stay for a set period. Ask who takes over your account if they leave.
Where this guidance stops
This article is general education on what happens to clients when an advisory firm is sold: how the rules and the options generally work.
It is not tax, legal or investment advice, and nothing here is a recommendation for your situation. Rules change and outcomes turn on the facts, which is why a CPA and an attorney look at a family’s own numbers before anything is done.
Sources
- Investment Advisers Act of 1940, §205 (advisory contracts)
- Investment Advisers Act of 1940, §202(a)(1) (definition of assignment)
- SEC: Investment Adviser Public Disclosure (look up any firm’s Form ADV)