If you already have a million-dollar portfolio, you have access to a different world of financial advisers than the average household.
The more money people already have is also correlated to how receptive they are to paying out of pocket for a fee-for-service practitioner: advisers who only charge for advice on either an hourly or flat rate project fee. This model of advice is also helping to address the HENRY problem , but fee-for-service models are still a small share of the market for financial advice.
“Minimums are a proxy for revenue, so it’s effectively a minimum revenue model. My offering is designed around providing high-touch service to clients. Providing this service at all levels of wealth is not feasible, given the time and overhead,” Mr. Pereira said. His business model allows for a ratio of 85 households per adviser.
“There is no such correlation in Canada. Lowering the cost of distribution of advice to Canadians is a major issue no one in Canada is talking about.”