So I just talked to a financial advisor for the first time today, trying to get a retirement plan set up. He has the CFP behind his name, but when I asked if he was a fiduciary, he said yes but only for investments of $25k or more. Basically said people like me with not a lot to invest in the beginning can opt to switch to a fiduciary relationship once we have that amount of money invested and we're no longer just getting started. Said the same thing about fees, that it's a non-fee based structure now, but we can change that once we actually have something sizable to work with.

Is this all normal for someone starting out with not a whole lot to invest, or a red flag? I'm pretty clueless when it comes to this stuff.

Thanks

yes its normal,  a guy with 25k to invest is the same amount of work and maybe more than a guy with 500k to invest and with a much smaller fee generated.  

This.

The services provided with a fiduciary relationship are costly (for the provider). A portfolio less than $150,000 would likely not generate a management fee (in most cases) sufficient for the provider to break-even.

When you see a fee-only investment advisor with a high minimum that's why.

He's going to be too expensive for you anyway.
You can set up simple investments with less cost, which means more growth.
When it gets bigger, if you keep growing it as the years pass, then that relationship might make more sense for both of you.

Sounds like you need to do some research and likely handle this yourself.   Most people balk at that but I would say, "why not you?"  Read some books, devise a workable plan and get it done.   You can do it and for the kind,of money you can afford to spend his advise will not be much better than anyone else with a little training.  If he was a rockstar at it why is he talking to you and not on Wall Street?  If he isn't what can't $200 in investment books do what he can?

Your local bank may offer it for free. I have chase and they do, but the last guy I was not impressed with so I do it my self.




 

The odds are very good that a “financial advisor” is going to spend just as little time with a $25,000 client as he can.  There’s no money in it for him.  He’ll probably stick you in a cookie-cutter “balanced formula” package that’ll make just enough money that you’ll stick with him.  
As a former stockbroker, I advise you to subscribe to one of the top-rated no-load mutual fund newsletters.  Buy directly from the source (Fidelity, Vanguard, etc.) and avoid wasting money on broker fees.

I highly advise going to bogleheads.org and discussing the question there.

Last 2 posts nailed it.

that should tell you somthing

Also to actually answer the question, his firm probably has a 25k min for fee based accounts in which he is going to act as a fiduciary. In the mean time, you would go into a brokerage account which he doesn't.

Come next year this all may change due to a new finra regulation.