Advisors: Not Only for the Rich
It’s a widely held myth: Financial advisors are only for the rich. I keep hearing this blithe – and oh, so false – assertion repeated promiscuously, and often by people who should know better.
The numbers tell a different story. Our table (see below) gives insight into the real-life world of advisors. Check out the advisor types highlighted in yellow. This shows a far different picture from the standard baloney that all advisors wear bespoke silk suits and cater exclusively to plutocrats.
According to data from research firm Cerulli Associates and my own company’s Meridian IQ (which is the planet’s premier registry of information on financial advisors), the largest category – independent broker-dealers – has an average account size of just $78,469. Now look at small registered investment advisor (RIA) firms, whose accounts average $65,447. Add in advisors who work for banks ($103,413) and insurers ($11,653).
The four types comprise 74% of the advisory client base and 71% of total advisors. That’s a lot of financial advice given to the non-rich.
Indeed, there are plenty of advisors who specialize in the middle-class and in young folks, who have yet to amass sizable assets. Edward Jones, for instance, has built its business on people of modest means: Its average account size is $90,000.
To be sure, a couple of advisor categories have sizable average account totals. Large RIA firms tend to oversee high-end accounts, averaging $1.29 million. Then come the wirehouses, giant outfits like Morgan Stanley and Bank of America-Merrill Lynch. Their average account is $425,944. While that’s a hefty chunk of change, odds are it started out much smaller and grew through time.
Blair Hodgson DuQuesnay, investment director of ThirtyNorth Investments in the New Orleans area, is part of a growing cadre of young (she’s 31) advisors specializing in those just starting out in their adult lives. DuQuesnay, who also writes for us at AdviceIQ, told Business Insider: “On so many occasions, I heard people say that they wished they had enough money to work with me. Part of my job is to educate people and tell them that, even if they have no assets outside a 401(k) or a home, there are still things that I can do to help.”
Regardless of age or income, everyone should have a good financial advisor.
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AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.