How to join the millionaire's club.

Kelly Rodgers, MoneySense May 2002

If you have millionaire friends, you may have heard envy-inducing stories about their investment counselors. The best counselors are the Jeeves of the investing world. Just like a perfect butler, they anticipate your every need and satisfy it. For starters, they structure your portfolio to your exact personal specificafion. Then they select good stocks, minimize your taxes, plan your estate and even, if you so desire, teach your kids about money. Better yet, they perform all of these functions for a price that's less than half what average investors pay for a plain-Jane mutual fund. A typical fee for an investment counselor starts at about 1% to 1.25% of your assets and it can tumble as low as 0.75% as your account grows larger.

So why doesn't everyone use an investment counselor? The hitch-until now has been the minimum account size. Investment counselors, also known as discretionary portfolio managers, lavish their attentions only on clients with big wallets and, especially during the boom years of the late '90s, counselors were able to be choosy. Most firms demanded that clients have at least $500,000 to invest and many counselors set a $1 million minimum or even more.

Here's the good news: investment counseling firms have become more flexible about these minimums now that the stock market has tumbled and dotcom millionaires have stopped falling out of the skies. If you're a typical middle-class investor with a sizable but not huge portfolio, you can make their hard times work to your advantage.

Over the past few months, I have seen $500,000 minimums waived for portfolios that were close to $400,000. I have also seen a number of instances where the service provided to clients has increased dramatically. I suspect that many firms are now willing to dicker about their minimums, especially if you approach them in the right way.

Finding these firms is easier than you think. There are two free sources of information. The first is the membership directory of the Investment Counsel Association of Canada membership directory (www.investmentcounsel.org or phone [416] 504-1118). The second is the directory section of my own Web site (www.rodgersinvestmentconsulting.com). Both sites provide contact information for firms across Canada and allow you to research investment philosophies and minimum account sizes.

When you have decided which firm you would like to work with, call it up and introduce yourself. If your account falls shy of the firm's minimum, be prepared to explain why the firm could benefit from taking you on as a client. Here are a few pointers on how to sell yourself:

You are a centre of influence and can direct more accounts to the firm. If you're an accountant or a lawyer, let the firm know. Same thing if your parents or siblings are big shots. Your account alone may be just $300,000, but the combined accounts of your family or your clients may be worth much, much more. Given that, a firm with a minimum account size of $500,000 may be happy to take you on as a first step to landing the millions in those other accounts.

You know one of the firm's existing clients. Minimums are often waived as a gesture of goodwill to an existing client who refers you. After all, no firm wants to risk offending an existing client who may have influence over prospective accounts and millions of dollars of assets. Of course, it helps if the existing client has a larger-than-average account.

You have stock options or other assets. Cash is king, but if you're thinking of selling your home, cottage or business within two to three years, let your prospective investment counselor know about your plans. Ditto if you're in a position to cash in on stock options. In any of these situations, the proceeds from the sale will give you a wad of cash to move into your portfolio. That will increase the size of your investment account down the road-which makes you a far more attractive client today.

You're young. The younger you are, the more attractive you should be in the eyes of an investment counseling firm. That's because a 40-year-old with a few hundred thousand dollars in assets will probably generate more fees than a 70-year-old with a million. After all, if you're 40, you're not likey to be withdrawing funds from your investment account. In fact, you will probably be making regular contributions and adding to your account year after year as you accumulate more wealth. Firms like that a lot. Gussy yourself up, and they'll like you too.