Should Financial Advisors Set a Minimum Account Level?

Financial Advisors: Is setting a minimum account level the right move?

Financial AdvisorsWorking with fewer clients who come with larger accounts is a highly-desired achievement for many financial advisors, but making this a reality can be challenging. This pinnacle of wealth management can occur when an advisor sets a higher minimum account size for his or her clients. The challenge comes in communicating this properly to existing and new clients. If you impose a minimum on current clients, some may feel abandoned or depreciated. Plus, making an allowance for some clients but not others to abide by the minimum can come off as a sneaky sales tactic and potentially discredit your reputation.  And, turning away loyal, steady clients who perhaps can’t meet this minimum will cause you to lose revenue. Because setting a minimum account size has both potential pitfalls and benefits, how can financial advisors do so in a manner that will actually take their business to the next level and improve their reputation among clients? Let’s take a look at a few financial advisor success strategies when it comes to setting minimum level standards:

Finding the Right Minimum For Your Business

What is the ideal minimum account level for your clients? There are a few ways to come up with this figure and they involve knowing how much it costs you to support each client and what your market can handle. First, determine the cost to support a client. This can be done in a variety of ways, but there are two equations that can get you started:

Hourly Rate equation: Total revenue minus all expenses = your net revenue ÷ the number of hours worked = your hourly rate for clients

Cost Per Client equation: Total operating costs – all marketing expenses ÷ number of your clients = your annual cost for each client

Adding these two totals together will provide you with your cost to support each client. Next, you will want to determine what your market can handle. This can be accomplished by reflecting on your current clients and the average of investments made. Perhaps your average client invests $150,000, or maybe higher…say $300,000 – use this figure as a ballpark average. Be moderate in the beginning when setting a minimum, as this gives you the opportunity to increase it in the future.

Sharing Your Minimum with Clients

Now that you have selected your minimum, it is time to share it with others. Don’t be shy, in fact, a helpful financial advisor success strategy is to advertise it whenever possible – with prospects, at meetings, at career-based social events, etc. Letting others know you concentrate on investment accounts of $(your minimum) can actually set you apart from others. Over time, you can build a reputation for specializing in this niche, and hopefully can gain additional accounts that line up with this figure.

In addition, you may decide to keep current clients who don’t fall into the minimum standard you set. To help them not feel rejected, it is crucial to communicate your continued loyalty to them as they have stayed loyal to you. You may also want to voice your appreciate for their business, plus share with them your new service level plans and the benefits. Your current client may grow into a larger client or they may refer someone your way.

Are Exceptions Allowed?

You will most likely come across scenarios where you consider making an exception. This can and does happen, and typically involves other qualifiers besides investment amount. These qualifiers could be: the client’s level of influence in the community; that he or she is a relative or good friend of a current client; the ease of the client’s investment management; or you and the prospect hit it off. Exceptions occur in many types of careers. For example, a lawyer or surgeon may take a smaller case because they believe they can offer assistance. As a financial advisor, you may decide to do something similar.


These are just a few financial advisor success strategies if you are considering setting a minimum account level. To learn additional financial advisor tips and tactics, visit Summit Brokerage Services has been voted the #1 boutique independent broker dealer in the country. Let us show you why! To experience the Summit difference, learn more about our network of independent financial advisors, and begin creating your financial planning documents, visit or call us at (800) 354-5528.


About Summit Brokerage Services, Inc.

Summit Brokerage Services is part of Cetera Financial Group. Summit Brokerage provides a broad range of securities brokerage and investment services to primarily individual investors. Summit Brokerage also sells insurance products, predominantly fixed and variable annuities and life insurance through its subsidiary, SBS Insurance Agency of Florida. Summit Brokerage also provides asset management services through its investment advisor, Summit Financial Group, Inc.


About Cetera Financial Group

Cetera Financial Group® (“Cetera”) is a leading network of independent retail broker-dealers empowering the delivery of objective financial planning advice to individuals, families and company retirement plans across the country through trusted financial advisors and financial institutions.  Cetera is the second-largest independent financial advisor network in the nation by number of advisors, as well as a leading provider of retail services to the investment programs of banks and credit unions.

Through its multiple distinct firms, Cetera offers independent and institutions-based advisors the benefits of a large, established broker-dealer and registered investment adviser, while serving advisors and institutions in a way that is customized to their needs and aspirations.  Independent financial advisor support resources offered through Cetera include award-winning wealth management and financial planning and advisory platforms, comprehensive broker-dealer and registered investment adviser services, practice management support and innovative technology.  For more information, visit

*”Cetera Financial Group” refers to the network of retail independent broker-dealers encompassing, among others, Cetera Advisors, Cetera Advisor Networks, Cetera Financial Institutions, Cetera Financial Specialists, First Allied Securities, Girard Securities, and Summit Brokerage Services.


All information herein has been prepared solely for informational purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy.


Content created by Summit Brokerage Services, Inc.

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