High net worth individuals often gravitate toward having more than one financial advisor to manage their portfolios in an attempt to diversify investment strategies and minimize their risk.

Diversification should not be limited to just owning many different stocks, it also includes investment strategy, said Bill DeShurko, president of 401 Advisor, a registered investment advisory in Centerville, Ohio.

"You should put the majority of assets or 75% with an advisor that has an investment philosophy that matches your goals and 25% or so with a strategy that doesn't correlate with the first strategy," he said.

Younger investors should wait until their portfolio has reached $100,000 before adding a second strategy, DeShurko said.

"For many clients, we use a mutual fund momentum strategy with their 401(k) and a dividend growth strategy with rollovers - neither of these require a certain account minimum," he said.

Numerous accounts of financial advisors who have mishandled or stolen their clients' money has lead to a growing distrust of them, leading many investors to be more wary and savvy.

"Some people are concerned with the return 'of' their money by their advisor in as much the return on their money," said Jon Ulin, a managing principal of Ulin & Co. Wealth Management in Boca Raton, Fla. "With many stories of individuals being sold investment products that were not in their best interest or invested in poorly performing portfolios, diversifying with two, three or even four advisors is not uncommon."

Advantages of Adding an Advisor

Adding another advisor to manage your portfolio has many upside implications. Investors who are currently using a "fee-only" advisor and want to diversify into commissioned products such as annuities, life insurance and private REITS, should consider adding another advisor since some of them do not sell these investments, he said. The reverse is also true for investors whose commissioned broker or insurance agent is not providing comprehensive financial and retirement planning and they should seek out a certified financial planner.

Investors could opt for one advisor to focus on publicly traded equity while other one manages investments for private equity, said Patrick Morris, CEO of New York-based HAGIN Investment Management.

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Different investment strategies can lead to better returns in the long run, said Ron McCoy, a portfolio manager of the LOWS fund (Levered Options Writing Strategy) on Covestor, the online investing company and chief investment officer at Freedom Capital Advisors in Winter Garden, Fla.

"What works in one market may not work in another and having two or three sets of eyes managing your money can be a plus," he said. "Having more that one advisor can also reduce 'firm risk' in the event you have all your money with one that is doing some unscrupulous things so you can avoid getting completely blown out like Bernie Madoff's clients did."

Obtaining a second opinion before buying a stock or changing the allocation in your portfolio can be helpful, McCoy said.

"Don't be afraid to ask a few advisors what they think and compare what they are saying to see if makes sense," he said. "Be wary of the advisor who has an answer for everything because no one has all the answers."

Risks When You Add an Advisor

As the number of investment professionals who manage their money increases, investors may find themselves in a situation where the "law of diminishing returns can affect your nest egg," Ulin said.

When your advisors fail to communicate with each other frequently, investors may find themselves owning duplicate products and investment holdings which can skew the allocation of their portfolios.

The lack of tax efficiency may also emerge since an advisor which has gains in your account to "work to execute a tax loss harvesting strategy from another advisor's account which is down," he said.

Investors who opt to have multiple financial advisors should ensure they choose a lead who can audit the other advisors' statements in quarterly meetings, Ulin said.

"This will help you to minimize your risks and problems of working with too many investment professionals while increasing your ability to maintain a handle on your big picture," he said.

Younger investors or individuals who want to eschew paying fees could bypass using an advisor and focus on a diversified portfolio and rebalancing periodically, said Morris.

"For most people, the best advisor might be no advisor," he said. "Smaller investors have the tools they need to keep on track without an advisor. Ultimately, indexing wins in all periods that are relevant to investors today. Cheap, effective and efficient options exist and the big platforms tacitly endorse them by applying high minimums."