How to Hire a Top Financial Advisor Even If You Don’t Have Much to Invest

by Neal Frankle, CFP ®

You can hire a top financial advisor – even if you don’t have much money. A few weeks ago I received an e-mail from “K” asking how to invest her IRA accounts. She was convinced that she didn’t have enough money to hire a top financial advisor.

Not everybody needs to hire a financial advisor. But if you want to have a top financial advisor, you can do so even if you have limited assets.

When should you hire an advisor?

Top financial advisors are most helpful in creating a financial plan and managing your assets. If you can create your own financial plan and manage your own money, you don’t need a financial advisor. If you know what the best investments for retirement income are, you shouldn’t pay someone else. If you are struggling with debt, a financial advisor can help, but may not be the ultimate best source.

If, however, you need a financial plan and/or money management services, you need a good advisor. So the question remains: How do you hire a top financial advisor even if you have limited resources? Here are three ways to hire a top financial advisor with as little as $25,000 to invest:

1. Don’t assume.

Some advisors require a minimum investment of $100,000; $500,000; or more. If you meet those minimums, your advisor will manage your assets and also offer financial planning services. If you don’t have that kind of scratch, don’t assume your only options are to use a stockbroker or to do it yourself.

Many advisors (myself included) offer a menu of services you can pick and choose from. You can often hire an advisor to create a financial plan for a very reasonable amount. If you don’t need a financial plan but want money management services, you might still be able to get a good financial advisor to manage your money.

You may not get the hands-on approach that a $500,000 client would get, but if the advisor is set up correctly, he or she can take you on and deliver good service.

2. Make rich friends.

The second approach is to talk to friends who do have top financial advisors. Ask them to talk to their advisors. If your friends are especially important to their advisor, that advisor might agree to take you on as a favor to your friend. Ah…Protection. It’s not just for the Mafia anymore!

3. DIY.

Make sure you really need an advisor. You might not. As I’ve written before, if you need life insurance, you don’t need an advisor. And you might be able to create a more than adequate financial plan all by yourself (or hire an advisor on an hourly basis to create one for you).

On investment management, I am a firm believer than one size does not fit all. My 25 years in the business convinces me of that. You need to employ an investment strategy that meets your financial needs and one that takes into account your need for “sleep at night.”

If you develop, execute and stick to your own strategy, all the power to you. If you want some help, you can use these three tips to hire an advisor even if you don’t have much money.

Where do you stand on this issue? Would you use any or all of these ideas? What other techniques can a reader use to find the right advice at the right price?



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{ 1 comment… read it below or add one }

Mark November 10, 2010 at 7:58 PM

Great article. You are correct. Most advisers that I know will make exceptions to their minimum. I have a minimum of $100,000 for new clients to invest but if someone is persistent or a buddy of mine, I forget about the minimum investment requirement.


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