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How Much Money Do You Need to Get Good Retirement Advice?

6 Minute Read

If you’ve ever heard someone say, “If you have to ask how much it costs, you can’t afford it,” they were probably talking about some expensive toy or knick knack wealthy people (or people who want to seem wealthy) buy.

Unfortunately, though, many people believe that expression also applies to investing advice. A recent survey of Americans shows that 63% of those who have never consulted an investing professional put it off because they think they need thousands of dollars already saved just to schedule an appointment. More than half believe a professional’s services will cost more than they can afford.

The truth is personalized investment advice isn’t something only wealthy investors can take advantage of. Great advice is available no matter how much you have saved or how much you have to invest if you just know where to look.

Myth #1: I Need at Least $50,000 to Even Get an Appointment With an Investing Professional

It’s no surprise that most people believe the price of entry to simply meet with an investing pro is out of reach. Some pros do require their clients to have five- or six-figure account balances before they’ll do business with them. At a time when most people have less than $25,000 saved for retirement, it’s easy to assume you’re on your own to build up your balance to “professional-worthy” levels.

The amount of money people assume they need to work with an investing professional

Even automated online investing services, also known as robo-advisors, often require large initial investments or have high minimum balance requirements.

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That seems like a lot to ask for computer-generated investing advice. But larger accounts generate more money. And if you’re a business focused on the bottom line, you’ll only want to work with clients who have big balances.

But not all investing professionals are so focused on the bottom line that they exclude investors who need a pro’s advice to begin building up their retirement accounts.

Client-focused professionals are not mythical

“We don’t have a minimum balance requirement,” Chadd Hoeft, investing professional in Nebraska, said. “We think if a couple or individual can only afford to invest the minimum amount for a Roth IRA—or less than that—we want to educate them and get them going in the right direction so they get off to a great start."

Education is exactly what Kevin H., also from Nebraska, needed when he first contacted his investing professional, Justin Widick.

“At the time, we were only investing through our work [401(k) plans],” Kevin explained. “Mostly because we were ignorant about what we needed to do and what we could do. We simply didn’t know anything.”

Kevin and his wife have been working with Justin since 2008, learning the ins and outs of retirement investing.

“When we started, I didn’t even know that a lot of investing professionals had minimum balance requirements,” he said. “Since then, though, I’ve asked Justin what’s in it for him to work with smaller clients like me.

“He told me that further down the line, I’ll be one of those big clients,” Kevin said. “That’s their goal and mine. They’re building for the future as well.”

“Whatever someone’s retirement account balance may be, if they’re intentional about getting and working a plan, that’s fun to be a part of,” Justin said.  “Walking with them on that journey, year after year, encouraging them—it’s what we love to do.”

Myth #2: An Investing Professional’s Services Will Cost More Than I Can Afford

Advisors like Chadd and Justin truly enjoy helping new investors get started on their road to retirement. But it’s also how they make their living. And that’s where our next myth comes in to play.  More than half of the people who’ve never contacted an investing professional think they can’t afford to pay for their services.

Kevin admits he and his wife were initially concerned about costs as well. One of the first questions Kevin asked when he met with Justin was about how and when he’d have to pay Justin for his time.

“Any time you meet with a professional, you know you’ll have to pay for their services,” Kevin said. “But working with an investing pro isn’t like working with a lawyer where you have to write a check every time you talk with him.”

Know what to expect before you invest

For clients who choose to invest in front-loaded mutual funds, there is no out-of-pocket cost for working with an investing advisor. Chadd explained it this way: “If you have $100 to invest in a mutual fund, and the maximum mutual fund fee is 5.75%, then $94.25 will be invested in the mutual fund. The remaining $5.75 goes to the mutual fund company. The mutual fund company then pays our commission from a portion of that.”

Unless you choose a fee-based arrangement with your advisor, you’ll never have to write a check to pay for your advisor’s time.

Finding the Confidence to Take the Leap

For investors like Kevin who make the leap to contact an investing professional, investing becomes a whole new experience.

“We’re investing more through our workplace plans and we’ve got IRAs we invest in through Justin,” Kevin said. “We feel more secure in our retirement outlook—much more secure than when we began and knew nothing.”

Kevin’s experience lines up with surveys of other investors who work with their own investing professionals. More than a third also increased the amount of money they were setting aside for retirement, and 78% are significantly more confident in their retirement savings plan than investors who are going it alone.

Kevin’s parting words for investors who are still on the fence about meeting with an investing professional: “Just get started right now. It will be better than if you wait until later,” he said. “Even if you don’t begin investing now, at least you’ll have that knowledge of where you need to begin and what your options are when you are ready to invest.”

Are you looking to invest but don’t know where to find an investing professional? We can help!  Stop waiting to become “professional-worthy” and find your investing pro today!

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