The Minimum Investment for a Financial Advisor - SmartAsset (2024)

For some, working with a financial advisor may connote having pockets deep enough to meet with an expert in a mahogany-paneled office. But you don’t always need to be wealthy to benefit from financial advising. There are many types of advisors, and most investors will be able to find one who works for their specific situation.

A financial advisor can help you best determine if you are on track to meet your long-term financial goals. This expert can work to help you save more, reduce your debt and invest more wisely. But how much do you really need in order to invest with an advisor? We’ll unpack that below.

How Much Money Should You Have Before Hiring a Financial Advisor?

Investment managers, financial consultants, financial planners and even digital investment management services called robo-advisors are all considered financial advisors. As a result, minimum thresholds vary widely.

The amount of money that you’ll need to get approved as well as how much you should have before it really pays off might have the same answer. The right amount of money you’ll need will depend on what you’re looking for a financial advisor to do as well as how much you’ll have to pay in fees. Generally, having between $50,000 and $500,000 of liquid assets to invest can be a good point to start looking at hiring a financial advisor.

Some advisors have minimum asset thresholds. This could be a relatively low figure, like $25,000, but it could $500,000, $1 million or even more. In general, if an advisor requires a minimum of $100,000 to open an account, you can assume that the financial advisor also offers wealth management services, tax and estate planning.

However, wealth managers are not the only financial advisors. People with less than $100,000 in assets can also benefit from hiring a certified advisor. If you have no or very little (we’re talking less than $25,000) in cash, you could speak to a Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA) who could help you formulate a starter plan to build up your assets.

Robo-advisors are also enjoying a surge in popularity, and they too are considered financial advisors. Many large investment firms, such as Fidelity, Vanguard, Merrill and Charles Schwab, offer robo-advisory services. Robo-advisors often charge no advisory fees, no commissions and, best of all, you can open an account with as little as $10. These accounts build diversified portfolios and invest your money in low-cost exchange-traded funds (ETFs).

When Should You Speak with a Financial Advisor?

The best time to speak with a financial advisor is simple: as soon as possible.

Financial planners may charge a fee to evaluate your financial position and recommend a plan that helps you towards your goals. Low-minimum robo-investment services make it accessible for lower-asset individuals to start building wealth early on, and if you do have a substantial amount of assets, speaking with a qualified advisor can help you decide where and how to manage your money over time.

How Much Do Financial Advisors Cost?

There are two types of financial advisors: fee-only and commission-based. Fee-only financial advisors are preferable, as you can be assured that they are not recommending investments to you in order to pad their bottom line. Commission-based advisors, on the other hand, are paid based on the product referrals and sales they make.

Fee-only financial advisors may charge an hourly, monthly or flat fee to recommend investments, adjust your asset-allocation and manage your portfolio. In the case of robo-advisors, there is often no advisory fee, but you could pay fees to buy and sell their recommended ETFs–which may be affiliated with the robo-advisor managing your account.

For a human advisor, expect to pay a fee. This may be a straightforward $200-per-hour fee, or it may be 1% of managed assets. Oftentimes, financial advisors require minimum investment thresholds so that 1% fee can cover their costs to manage your money. After all, 1% of a $100,000 minimum means they only earn $1,000 in a year from your account. In most cases though, financial advisors offer a menu of services so that potential clients can select the level of attention and help needed.

The Bottom Line

Financial advisors can help individuals across the board, so don’t wait to speak with one. They can help you reduce debt, save more and invest in ways that might not be possible without their help. You should look for fee-only advisors, as these financial advisors will best represent your interests over the long term.

Tips for Building Wealth

  • Not sure what investments and strategies will help you meet your long-term goals? For a solid financial plan, consider speaking with a qualified financial advisor. Finding a financial advisor doesn’t have to be hard.SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Use SmartAsset’s free investment calculator to get a good estimate of how to grow your money over time.

Next Steps

Do you want to learn more about financial advisors? Check out these articles:

  • What Is a Financial Advisor Disclosure?
  • Can a Financial Advisor Steal Your Money?
  • How much do Financial Advisors Charge?
  • What Commissions Do Financial Advisors Earn?
  • Are Financial Advisors worth it?

Photo credit: ©, ©, © meekodong

The Minimum Investment for a Financial Advisor - SmartAsset (2024)


How much do you need to invest for a financial advisor? ›

Another option to consider is a financial advisor that charges a percentage based on the assets they manage. This fee can range from 0.5% to 2%. Usually, advisors that charge a percentage will want to work with clients that have a minimum portfolio of about $100,000.

At what net worth do I need a financial advisor? ›

Generally, having between $50,000 and $500,000 of liquid assets to invest can be a good point to start looking at hiring a financial advisor. Some advisors have minimum asset thresholds. This could be a relatively low figure, like $25,000, but it could $500,000, $1 million or even more.

What is the minimum account size for wealth management? ›

Any minimums in terms of investable assets, net worth or other metrics will be set by individual wealth managers and their firms. That said, a minimum of $2 million to $5 million in assets is the range where it makes sense to consider the services of a wealth management firm.

Is a 1% financial advisor worth it? ›

But, if you're already working with an advisor, the simplest way to determine whether a 1% fee is reasonable may be to look at what they've helped you accomplish. For example, if they've consistently helped you to earn a 12% return in your portfolio for five years running, then 1% may be a bargain.

Should I get a financial advisor if I'm poor? ›

It's smart to use a financial adviser when you need or want professional financial advice. If you happen to have a high net worth and you're comfortable managing it yourself, there may be no need. Even if you don't have a high net worth, if you have a complex situation to deal with, you may want to consult someone.

Is 2% fee high for a financial advisor? ›

Most of my research has shown people saying about 1% is normal. Answer: From a regulatory perspective, it's usually prohibited to ever charge more than 2%, so it's common to see fees range from as low as 0.25% all the way up to 2%, says certified financial planner Taylor Jessee at Impact Financial.

Do millionaires use financial advisors? ›

Key takeaway: It's no coincidence that most American millionaires use a financial advisor. With an experienced financial advisor on your side, you are more likely to take the strategic actions necessary to achieve your long-term goals.

How many millionaires use a financial advisor? ›

The wealthy also trust and work with financial advisors at a far greater rate. The study found that 70% of millionaires versus 37% of the general population work with a financial advisor. Moreover, 53% of wealthy people consider advisors to be their most trusted source of financial advice.

How many millionaires have a financial advisor? ›

Despite 70% of Millionaires Using a Financial Planner, One-Third May Outlive Savings — Here's Why.

What is the minimum investment size? ›

A minimum investment is the smallest dollar or share quantity that an investor can purchase when investing in a specific security, fund, or opportunity. A hedge fund, for example, may require that their clients deposit at least $100,000 with the firm. Or, a mutual fund may require at least $3,000 to be invested.

What is the best financial advisor company? ›

You have money questions.
  • Top financial advisor firms.
  • Vanguard.
  • Charles Schwab.
  • Fidelity Investments.
  • Facet.
  • J.P. Morgan Private Client Advisor.
  • Edward Jones.
  • Alternative option: Robo-advisors.

What is the 72 rule in wealth management? ›

Do you know the Rule of 72? It's an easy way to calculate just how long it's going to take for your money to double. Just take the number 72 and divide it by the interest rate you hope to earn. That number gives you the approximate number of years it will take for your investment to double.

What does Charles Schwab charge for a financial advisor? ›

Common questions
Billable AssetsFee Schedule
First $1 million0.80%
Next $1 million (more than $1M up to $2M)0.75%
Next $3 million (more than $2M up to $5M)0.70%
Assets over $5 million0.30%

What financial advisors don t tell you? ›

10 Things Your Financial Advisor Should Not Tell You
  • "I offer a guaranteed rate of return."
  • "Performance is the only thing that matters."
  • "This investment product is risk-free. ...
  • "Don't worry about how you're invested. ...
  • "I know my pay structure is confusing; just trust me that it's fair."
Mar 1, 2024

What is the average return from a financial advisor? ›

Source: 2021 Fidelity Investor Insights Study. Furthermore, industry studies estimate that professional financial advice can add between 1.5% and 4% to portfolio returns over the long term, depending on the time period and how returns are calculated.

Do financial advisors invest your money for you? ›

Together you and a financial advisor refine your short- and long-term goals, and then your advisor helps you stay on track to achieve those goals. With some advisors, you can do your own investing. Others offer full-service investment management services, handling tasks like trades and portfolio rebalancing for you.

What is the average return on investment with a financial advisor? ›

Source: 2021 Fidelity Investor Insights Study. Furthermore, industry studies estimate that professional financial advice can add between 1.5% and 4% to portfolio returns over the long term, depending on the time period and how returns are calculated.

How much should I pay for a financial coach? ›

Financial coaches typically charge an average of $257 hourly or per-session fees for their services. Some coaches also offer coaching packages that range from a few hundred dollars and reach up to $5,900. Unlike financial coaches, financial advisors may earn commissions on the products they sell.

Is it profitable to be a financial advisor? ›

Financial advisors earn an average salary of $92,000, while the top income earners make $150,000 and above. The average low-end salary for advisors with 1-2 years experience is roughly $63,000.

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