Finding a Financial Advisor if You Are Not Rich: Options for The Middle Class Investor

It happens far too often but most people who actually need financial advice, just don’t get it. This is largely because of the fear that it costs too much or beyond their current financial expenditure and also a skepticism of how much help they can actually get.

Yet, it is precisely these people who need financial advice the most to move to the next level in their lives. The simple rule is this: If you are impoverished or if you are struggling to pay your bills regardless of what income you bring in, you need financial help.

When you are wealthy and you are able to keep bringing in new income and your income far exceeds your expenses, you know what you are doing. Even then, you can use financial advice to learn how to best invest your dollars, areas you can reduce expenses and ways to save.

Problem: Most Advisors Focus on the Wealthy

Many financial advisors at banks and broker dealers make this transition for the middle class to upper income hard because they face more banking regulations and associated costs and hence are focused on the bottom line and shareholder value according to Jon Ulin, a managing principal at Ulin & Co. Wealth Management in Boca Raton, FL.

In fact, many firms consider accounts ranging from $100,000 to $500,000 in assets to be too small to issue out commissions. Facing steep minimum requirements, small investors are unable to get the same personalized attention. Instead, they have to use phone-based call centers that pose risks. As Deborah Spreyer, an attorney in Philadelphia who works with a lot of financial practices, points out, “Its shocking that many brokerage firms wont take clients with less than half a million dollars. Its like a doctor who will only allow healthy people in his practice. Firms that do take less than those minimums, often charge as much as 2 percent in annual fees.” The standard fee is closer to 1 percent.

What are your options for as middle-class investor?

Below are some ideas to get you organized and started:

#1 Doing Your Homework

Create a list of what services you need and how you want to work.

  • Consider fee or commission-based:

Figure out what kind of financial advisor you want to meet with, whether the person works on a fee or commission basis. The fee can be hourly or an annual fee based on the assets under management while the commission is a fee based on the financial products you buy. 

  • Investments or advice:

Do you want help with investments and retirement planning or do you just want financial advice when you have a question? Do you need financial planning?  

  • Be prepared with questions:

What questions do you want to ask? Basic questions you can ask include: 

– What standard do you adhere to – fiduciary or suitability?
– What licenses do you hold?

  • Know the basics:

A fiduciary advisor is legally bound to provide the best for you and considers the client first in all planning and product selection while a suitability-based advisor chooses products based on suitability not necessarily personalized for you.

There are a lot of licensing options but look for an advisor with a Series 65 license as that indicates that your advisor is equipped to do financial planning.

Fiduciary titles are also recognizable from RIA, a registered investment advisor to IAR investment advisor representative, CFP or certified financial planner, CRPC or Chartered retirement planning counselor and AIF or accredited investment fiduciary.

  • Stand up for yourself:

What do you need? Make it clear what your financial goals are. You cannot expect your advisor to know that you want to take a long vacation or college course or purchase some large item (house or other) without making your intentions and desires clear. Explain your goals and stick up for what is important to you. It is your money and your life.

#2 Finding Your Advisor:

  • Personal Recommendations:

Your first option is to ask friends, colleagues and family for personal recommendations.  

  • Caters to Middle class audience:

Some companies and professionals specifically cater to the middle class. This may include assistance on the phone and by email. Some companies offer financial tools online that help you learn and plan your finances strategically with varying accounts based on investments and where you can use an online broker for financial advice without transferring your assets to the online site.


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