How Much Money Do I Need to Work With an Advisor?

How Much Money Do I Need to Work With an Advisor?

August 25, 2016

If you’ve read some of my previous blogs, I’ve talked about how a financial advisor can help you and why many people, regardless of their job or income, can benefit from working with an advisor.

For one, an advisor helps keep you focused on your goals, which can make it easier for you to accomplish them. Furthermore, an advisor can answer your most important financial questions and help you stay on track as a family.

Who Can Work with an Advisor?

While there are many advantages to working with an advisor, many people don’t. Only around 52% of pre-retirees and 44% of retirees consult a financial advisor — and that number drops among younger generations. The reason why? For many (around 27%), they don’t think they have enough savings or investments to necessitate help.

However, this is a common misunderstanding. In reality, many people, from young professionals to growing families and business owners, can benefit from working with an advisor. I strongly believe it’s never too early to start saving and planning for the future. Yet, one of the most common investor pitfalls is not saving early enough.

Don’t assume you don’t have enough money to benefit from (or afford) working with a financial advisor.

The Three Qualities of a Great Investor

First, it’s essential to understand what makes a great candidate for working with an advisor. In my experience, I’ve found that there are three characteristics that help:

  • Motivation to save;
  • A focus on your goals; and
  • An ability to save.

While you need to have established some savings in order to grow it and pursue your goals, you don’t have to be a millionaire to work with an advisor. However, you do need to start somewhere so you can invest, start a retirement account, or embark on some other strategy.

The Costs of Working with an Advisor

Next, it’s important to understand how advisors are paid. There are three main ways an advisor may charge:

  1. Commission. For products like insurance or annuities, an advisor receives a commission based on the policy you purchase. In this instance, you aren’t directly paying an advisor any fees. In my practice, I charge commissions on insurance or annuity products, as well as mutual fund products that are not in an asset managed account.

  2. A percentage of assets under management. Some advisors charge a percentage of your assets that they manage in a portfolio. For example, if you have $100,000 of investable assets, an advisor may charge 1% annually (totaling $1,000 of that $100,000). In my practice, I charge 1% annually on accounts up to $1,000,000.

  3. A flat or hourly rate. Lastly, some advisors may offer the ability to pay a flat or hourly rate, or per-project fee. If you aren’t ready to invest, you and your advisor may decide that it’s appropriate for you to pay a flat rate for a financial plan or advice. These rates can vary, depending on the advisor.

Some advisors offer a combination of or all three of these payment options. This can make it easier for younger professionals, families, and Millennials to get a head start with their finances and work with an advisor.

If you don’t have significant assets to invest, you can start smaller with financial planning strategies designed to help you save and eliminate debt. As you save more, you can explore your investing and retirement planning opportunities.

The Next Steps

While there isn’t a set dollar amount recommended to start working with an advisor, I hope this shed some light on how anyone can get started with financial planning. You don’t need to be a millionaire to start working towards financial independence.

I work with clients of all ages and incomes facing various life milestones, from marriage to retirement. Whether you’re saving for your first home or selling your business, I’d be happy to meet with you and discuss how you can start working with an advisor. To set up a no-strings-attached meeting, call my office at (949) 221-8105 x 2128, or email me at

About Mike Loo

Mike Loo is an independent financial advisor with more than 20 years of experience in the financial services industry. His mission is to provide a meaningful impact on the lives of clients and the people they care most about, help them make educated decisions with their money, and build a strong financial foundation for both themselves and their next generation. Mike is committed to meeting a high standard of excellence, taking the time to listen to clients’ needs, and designing strategies that aim to help clients save money and reduce debt. He seeks to fit a client’s investments into their life and educate them so they’ll understand their investments. To learn more about how Mike may be able to help, connect with him on LinkedIn, call his office at (949) 221-8105 x 2128, or email him at

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Trilogy Capital, a registered investment advisor. Trilogy Capital and Trilogy Financial are separate entities from LPL Financial.