We recently received the following question from a prospective client:

If I sign up for your services and later want to withdraw from the relationship with Marotta, what would be the process? Are there any fees to withdraw?

A very astute question indeed! As we talk about in our safeguarding your money series and in our 10 Questions to Ask a Financial Advisor (our answers are here), companies or investment products which hold your money captive or charge you for extricating yourself should be avoided.

I applaud this prospective client for having the foresight to ask this question. Here’s how closing an account with Marotta Wealth Management works.

Marotta Wealth Management

When we accept a client, we see the relationship as a lifetime partnership and will continue to serve you for as long as we have together. Setting up a new client is a lot of work for us up front, so we ask that clients not sign up with the intention of terminating a few quarters later.

That being said, a client can terminate our services or extricate themselves from our investment strategy at any time. There are no financial hooks, termination fees, or such imposed by our firm.

A client can withdraw from the relationship simply by communicating to us that they would like to terminate our service agreement. After that, we would delink your accounts from our management, and they would remain open at the qualified third party custodian under your sole control.

We bill quarterly in advance of the work that we do. If you terminate in the middle of a quarter, we would also reimburse you a prorated portion of your last quarterly fee equal to the remaining days in the quarter.

Charles Schwab

Most of our managed accounts are custodied at Charles Schwab. We are not affiliated with Charles Schwab and receive no compensation from them.

If you terminate your relationship with Charles Schwab as well, they would charge a full transfer fee as is unfortunately common among custodians. Charles Schwab describes the process as:

To initiate a transfer of assets out of a Schwab account, your client should contact the receiving firm, which determines the required documents and procedures, and contacts Schwab to begin the process. A full transfer out will be charged $50.

While a full transfer is charged $50 and is initiated from the receiving institution, a partial transfer or series of successive withdrawals is typically not charged a fee and can be initiated with Schwab.

To implement a partial transfer, you can use the “Transfer of Assets Out; Partial Account or Charitable Gift Transfers ” form and indicate which securities you wish transferred to the new custodian. If you are doing this just to avoid the $50 fee, typically, you would pick all the securities and leave behind the cash. Once those transfers have settled, you can withdraw the remaining cash utilizing a MoneyLink or check request.

This strategy often works to avoid Schwab’s full transfer fee; although unpredictably, they may charge an account closure fee anyway.

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