Ah, the magic number: $1 million. For many financial advisors, it’s like a velvet rope outside an exclusive club. Investors might be left waiting in the metaphorical line if they don’t have the right amounts of assets—i.e., seven figures in investable assets.
But here's the catch: financial advisors rarely advertise this barrier outright on their websites. Instead, they leave it in the fine print of their ADVs, or it is tucked behind phrases like “high-net-worth individuals,” “affluent clients,” high-income producing individuals, or my personal favorite, “successful professionals.”
So, what gives? Why not just say it upfront? Why not state, “If you don’t have at least a million bucks, we might not be the right fit for you.” Well, that’s where information gets a little sticky.
A significant percentage of the investors out there don’t have $1 million of liquid assets, but they are still clicking on financial advisor websites hoping to find the right firm for their location, situation, etc.
So, here we are. Should financial advisors just come out and disclose their minimum asset requirement on their websites? Or, is there a better way to describe minimums on websites? There just might be a more transparent way to communicate minimums on websites that generate more investor engagements.
Pro Tip: You may be concerned about publishing a minimum on your website. If your current website is not producing leads then you have nothing to lose. You can always delete the minimum if you believe it is costing you new business.
Financial advisors don’t just pull the $1 million figure out of a hat. It’s a carefully considered number based on a mix of revenue goals, service models, current AUM, and client needs. For many, it’s the sweet spot where they can provide the right amounts of attention and advice without being stretched too thin.
But why $1 million? It’s psychological as much as it is practical. A million is a nice, round, aspirational figure. It means the financial advisor’s clients are millionaires. It signals exclusivity, sophistication, and success - all qualities that many advisors want their brands to reflect.
Pro Tip: If the financial advisor’s combined AUM is $100 million and the minimum asset requirement is 1% of the AUM then the minimum is $1 million of assets.
Plus, the minimum asset requirement ensures that the fees they charge add up to something substantial. After all, 1% of $1 million is much more appealing than 1% of $100,000.
Of course, some advisors arrive at their minimums based on their ideal types of clients. A million-dollar minimum makes perfect sense if they specialize in retirement planning for high-income professionals because that client will likely need advanced planning strategies and sophisticated investment solutions.
Ah, the million-dollar question (pun intended): Are these minimums set in stone? Well, not always. Many advisors have what we’ll call “soft minimums.” They might say they only work with clients with $1 million or more of assets, but if investors come to the table with $850,000 and exhibit growth potential, they might bend the rules. After all, future growth and loyalty can sometimes outweigh today’s portfolio balances.
On the other hand, some advisors are quite firm about their minimums. For them, it’s a matter of maintaining efficiency. They’ve built their advice and service models around clients with substantial assets, and working with smaller accounts could strain their operations or lead to less-than-stellar service. Plus, managing smaller accounts might not generate enough revenue to justify their time.
Here’s the thing: minimum asset requirements are often just another way to say, “I need to make sure I’m getting paid enough to make this worth my while.” Let’s face it: financial advisors don’t work for free, and their fees are typically a percentage of assets under management. So, if an advisor sets a minimum of $1 million, it’s likely because managing anything less wouldn’t generate enough revenue for them to provide the level of service they promise to their clients (a positive feature of their services).
It’s not that advisors don’t want to help smaller investors; it’s just that their business model is built around managing larger sums. They need to ensure their time, expertise, and resources are focused on clients who can afford the level of service that they provide. A $1 million minimum helps set that expectation, even if it’s not always spelled out clearly on financial advisor websites.
Some advisors are finding creative ways to work with smaller clients through AI technology, one-time planning fees, or tiered service levels. But if we’re talking about traditional AUM-based models, the $1 million minimum often serves as a proxy for, “This is how much I need to manage to make it work for both of us.”
Now we get to the heart of the matter: Is there a more transparent way for financial advisors to communicate these minimums without alienating potential clients? The short answer is yes. The long answer is also yes, but it requires a bit of discussion.
First off, financial advisors could just come out and say it on their websites. Simply said, “We typically work with clients that have $1 million or more available for investment.” Or, “Our minimum annual fee is $10,000. That cuts through the fluff and describes a clear requirement. No one’s time is being wasted, and the financial advisor doesn’t have to deal with awkward conversations when investors don’t meet their minimums.
Financial advisors should be able to explain why they have minimums (assets, fees, or both). It’s not just about exclusivity or being “too good” for smaller accounts. It’s about being able to provide the best possible service. For example, an advisor could say, “We specialize in working with clients with complex financial needs, which typically requires at least $1 million in investable assets to utilize our services fully. This ensures we can dedicate enough time and resources to help you achieve your financial goals.”
This approach reframes the minimum as something that benefits the investor rather than a barrier. It’s about quality of service, not just quantity of assets.
Another overlooked point is that minimums can sometimes be met through multiple accounts. For example, a client might not have $1 million in one account, but if they have $500,000 in a brokerage account and another $500,000 in an IRA, that might be acceptable for meeting an asset-based minimum.
Pro Tip: Advisors can clarify this on their websites to avoid losing prospects who might have otherwise been a good fit.
Investors find financial advisors online and learn more about them on their websites. However, we have never seen one advisor include a minimum asset requirement page on their websites. Some financial advisors have an Our Compensation page that describes how they are paid. But there is no information about minimums.
A near-universal solution is to withhold this information from investors. The advisor's intent is to provide this information during a sales presentation when they can answer questions and overcome objections in person.
There is a flip side to this strategy. There may not be a sales process if investors exit financial advisor websites without contacting them. This lack of disclosure may not create the transparency and trust investors are seeking before they are willing to give up their anonymity and contact advisors.
Pro Tip: Investors with millions of dollars may be seeking financial advisors who provide services to clients with millions of dollars.
Pro Tip: it is a lot more than a financial plan produced by third-party software and a passively managed portfolio of ETFs.
Investors are paying for financial advisors’:
Pro Tip: To take it a step further, a team of professionals, versus an individual, may be providing the advice, services, and time, that compounds the value of the financial advisor’s services.
This information should be communicated on financial advisor websites as part of their value proposition. For example: “When you hire our firm you get the best thinking of a team, versus the best thinking of an individual”. This works because, based on their past experience, many investors view individuals as sales representatives, which may be true.
Rather than hiding minimums or providing vague descriptions, advisors should highlight how their minimums ultimately benefit their clients. A higher minimum might mean more personalized attention, access to exclusive investment opportunities, or specialized planning services.
Advisors should also explain that their minimums allow them to focus on fewer clients, providing a higher level of service and more in-depth strategic advice tailored to their client’s needs.
By positioning the minimum as an important feature, advisors can avoid alienating investors while setting clear boundaries about who they are willing to work for.
What if the real purpose of a financial advisor’s $1 million asset minimum was to produce $10,000 of annual revenue? Would the advisor be better off publishing a minimum fee requirement?
The answer could be yes if you were willing to accept investors with smaller asset amounts as long as they pay the $10,000 minimum fee.
What if your client had a $1 million portfolio and it appreciated 10% during the most recent calendar year? The client's unrealized gain was $100,000.
Now, suppose you are a financial advisor who charges a 1% fee for his or her knowledge, advice, services, and time. Your fee would increase $1,000 per year based on the market appreciation.
This illustrates the aligned interests of the investor (receives 99% of the appreciation and the financial advisor (receives 1% of the appreciation). Just about all investors would view a 99:1 relationship a fair one.
Pro Tip: Don’t most hedge funds take 20% of the appreciation?
Financial advisors and their $1 million minimums—it’s a delicate dance. On the one hand, these minimums help ensure advisors can provide top-notch service to clients who truly need it. On the other hand, they can leave smaller investors feeling left out, especially when those minimums are not clearly communicated to them on financial advisor websites.
But there’s a better way. Financial advisors can set the right expectations without turning away potential clients by being upfront about minimums, explaining why they exist, and showing how they benefit clients.
After all, transparency isn’t just good for business—it’s good for building trust with the people who want it most. And who knows? Maybe one of those smaller investors will hit that magic million-dollar mark sooner than expected.
Final thought: What if your primary concern is taking on clients that do not produce $10,000 of annual revenue? What if a client with $900,000 was willing to pay a $10,000 fee for your services? Would you reject that client? If the answer is no, then you are better served publishing a minimum fee on your website.