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285 East Grove Street,

Clarks Green, PA 18411
The Truth About Account Minimums

The Truth About Account Minimums

February 14, 2018

Have you recently lost access to your financial advisor and is your retirement now in the hands of a “home office call center”?  If you answered yes to those questions, you may be unhappy and should understand what is occurring.  The truth is that you may have been abandoned by your previous broker due to your account size not measuring up to the firms minimum asset level. Some major banks and brokerage firms, whose clients total account value doesn't meet a minimum amount, are being turned over to their "call centers", where the advice provided is often limited to phone conversations with call center representatives.

"For example, one Brokerage firm has increased the client account minimum to $250,000 from $100,000.That means their brokers won't be paid to give financial advice to new clients who have less than $250,000 in assets. (Existing clients are an exception)" See: (Forbes)

This trend is growing and it’s leaving many middle class families and young professionals in the dust. The problem we see with this type of model is that financial planning and investment advice is being compromised and those individuals who may benefit the most are losing out.  For example, take a recent medical school graduate about to embark on a career in medicine.  This individual, who may be weighed down with a heavy load of student loan debt, will be going from zero compensation to a to six figure salary in the blink of an eye and, most likely, that person will now have to address planning complexities that require attention by a financial advisor today…Not when their investment accounts eventually measure up. 

So, what exactly is a “call center”?  Well, in short, it’s a centralized “back office” where employees who have securities licenses are available to service customer accounts that don’t meet the required minimums.  These call centers are basically the equivalent of a discount brokerage company that serves middle market investors who have limited access to financial advice from random call center employees over the phone. Could that advice be trusted?  Maybe, maybe not. The stock market has been on an extremely wild ride recently, swinging 1,000s of points in single trading days alone…Was your call center there for you?  Did your phone ring?  

"Some firms believe as financial advisors grow their practice it may make less sense for them to spend too much time on small accounts. And who wants to be on the opposite end of that kind of service? Those clients may be better off served elsewhere.”  See: (Forbes

Is $250,000  a small amount of money?  Can call centers really provide holistic, personalized planning and advice?   At Capstone Wealth Management Group, we don’t have account size minimums, our current clients will never be sent away, and we believe that account balances shouldn’t determine the level of services and advice provided.   Financial planning can be complex and all investors, whether affluent or just starting out, deserve and need proper planning.  If you or someone you know has been forced to “go it alone”, we can help.  Please call us for a free consultation at 888-587-7526.  

(Disclaimer): The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.