When I tried to do the same thing, the first thing they wanted to know is what is your total net worth and asset allocation. And rightfully so, they wanted to do a health check on where you are at and where they think that want to take you.
You can lie to them and say you only have $50k, but then you wouldn’t be off to a very good start with someone you’re suppose to trust.
Or you can tell them you only want them to manage $50k and never anything more..At which point, they might tell you to take a hike or they might do it anyway for a trial period with the understanding it must be more in the future…[/quote]I have no problem to let him/her manage more in the future if the net return exceeds the market. If they’re that confident in their performance capability, I don’t see why they wouldn’t start with a low limit to hook in the younger crowd who have high income growth but doesn’t have $100k in cash.[/quote]
Be careful when someone is willing to manage smaller sums in anticipation of managing larger sums if the investments work out. This is how most Ponzi schemes work — they give investors the promised returns in the beginning to gain their trust, then lure them in for higher amounts once they’ve earned their trust…and then, it’s all gone.
Yeah, I know, I know…according to some here I’m a “permabear” who’s afraid to take risks (which isn’t true at all). Still, it’s worth remembering. There are countless stories, some of them very well known, that back up what I’m saying.
