Quora Answer: Why are Financial Planners Not Some of the Richest People?

The following is my answer to a Quora question: “Why are financial planners not some of the richest people?  I am expecting you to manage my money.  Where is the flaw in my line of thinking?” 

How much money does the average client have that would make a financial consultant rich?  If that financial consultant had one client, and that client was a multi-billionaire who was exclusive to him, that financial consultant would be wealthy.  How much money do you have that managing your money would make a financial consultant wealthy?  The commission for financial servicing is in the single digits or low double digits.  That is a tiny portion of the entire management fee or distribution cost.  This means a financial consultant needs to have around 200 mass affluent clients to be financially comfortable. 

Financial consultants who manage high net worth clientele are some of the wealthiest people around.  If you are not a high net worth individual, you are not likely to meet that financial consultant, or if you do, you would not be able to afford what they recommend.  Even among them, there are different levels.  These types of financial consultants are either elite planners, senior relationship managers, or run their own consultancies. 

The flaw in your thinking is believing you can afford an elite financial consultant, or that they would be inclined to offer you their services.  You get what you can afford.