This morning at the gym, a fellow gym-mate said his financial advisor was dumping him. In conversation, he said his $300,000 investment isn’t ‘big’ enough to warrant the advisor’s time.

Let’s face facts, it is a common observation that many financial advisory firms set minimum investable asset requirements around or above $500,000 (see Fisher Investment commercials ‘if you have $500,000 or more, call us’).

Fact: The average Canadian’s retirement savings vary, but recent data suggests people over 65 have around $272,000 in cash, or about $517,000 in total retirement assets (including pensions/RRSPs). In other words, advisors are not interested in assisting the average Canadian retiree!

Why Advisors Focus on Higher-Asset Clients
·  Profitability: The dominant “Assets Under Management” (AUM) means an advisor earns a percentage of the client’s portfolio (typically .59% to 1.18%). A fee on a $50,000 portfolio generates about $500 in annual revenue.

·  Service Model Efficiency. Many financial firms structure their operations to provide in-depth services (tax, estate). Working with smaller amounts can strain firm resources.

·  Growing trend. Some large institutions have even raised their referral thresholds to $2 million signaling a market shift towards serving only wealthier clients.

Options for Clients with Less Than $500,000
·  Fee-only or flat-fee advisors. Advisors who charge an hourly or project-based fee for advice. This can be more effective for those who need a one-time financial check-up or guidance on specific issues.

·  Robo-advisors. Digital platforms like Vanguard or Fidelity offer low-cost, automated investing solutions with very low or no-account minimums.

·  Advisors with “soft’ minimums. Advisors who offer flexibility with their stated minimums who may accept clients with high earning potential.

·  Pro-bono services. Professional organizations such as the Financial Planning Association of Canada may offer access to pro-bono financial planning.
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For assistance to finding a financial advisor, check out my book, Retirement: The Ultimate Life Journey, Appendix, Finding and Using a Financial Advisor. https://www.amazon.ca/Retirement-Ultimate-Journey-Rick-Atkinson-ebook/dp/B0FWYWZPFS/ref=sr_1_6?crid=21NSUFSX6S767&dib=eyJ2IjoiMSJ9.cYFO5f8W4R42KZZVHtEFcqD58CpWT11EnCPb-B26H6vyWn-4HfEH6Wrdcb6RrHpcOls2pOR5YlTbL6qxjxyT5XRSNefw6n93tzH-cyeF7S4.UkyG-qoasdoX7QPJuQTZ3jxhLliHxQMqoWhHYFcHXyo&dib_tag=se&keywords=retirement+book+by+rick+atkinson&qid=1761496569&sprefix=retirement+book+by+rick+atkinson,aps,98&sr=8-6.  Also available in print format.