A percentage-of-assets fee usually costs least in dollars below roughly $200,000 and most above roughly $1 million, where a flat annual fee normally wins. Hourly or project pricing is cheapest when you have one specific question and want no ongoing relationship. Each model creates a different conflict: a percentage fee makes an adviser worse off when you withdraw money, a flat fee rewards doing less over time, and hourly billing makes people ration advice they need.
The three models, side by side
| Percentage of assets (AUM) | Flat annual fee | Hourly or per-project | |
|---|---|---|---|
| What you pay | A percentage of the balance, billed quarterly | A set dollar amount, billed monthly or annually | A rate per hour, or a fixed price per plan |
| Typical range | 0.5%–2.0% a year | $2,000–$10,000 a year | $200–$500 an hour; $1,500–$5,000 a plan |
| Cost as you grow | Rises automatically with the balance | Flat until renegotiated | Only when you use it |
| Who it favours | Smaller balances; those wanting ongoing management | Large balances with simple needs | One specific question |
| Investment management included | Yes, normally discretionary | Sometimes | Rarely |
| Built-in conflict | Advice against withdrawing, or against paying off a mortgage, reduces the fee base | Little — the fee does not move with your decisions | Incentive to bill hours |
| Ongoing relationship | Yes | Yes | No, unless you book again |
Each model has a conflict. Ours included.
Any fee arrangement creates an incentive, and the useful question is never “is there a conflict” but “which conflict am I comfortable with, and is it disclosed?”
The AUM conflict is ours, so we will name it. When an adviser is paid a percentage of what it manages, it is quietly worse off if you take money out to pay down a mortgage, buy a business, delay a rollover, or keep a pension instead of taking a lump sum. Every one of those is a decision where a good adviser must be willing to argue against its own revenue. Ask any adviser you interview to describe a time they did. We take a rollover in only when it is the right call — leaving a 401(k) where it is is often the correct answer, and it pays us nothing.
The flat-fee conflict is subtler: the fee is agreed once, so the incentive is to do less work for it over time. The hourly conflict is the oldest one in professional services — more hours means more revenue — and its second effect is worse: people ration advice they are billed for by the minute, so the call that should have happened never does.
Which one fits which situation
- A large, simple portfolio. Flat fee, almost always. At $2 million, 1% is $20,000 a year, and it is very hard to argue the work scales with the balance.
- One question, one time. Hourly or a project fee. “Should I take the pension or the lump sum” is a few hours of work, not a relationship.
- A modest balance and ongoing decisions. AUM is usually cheapest in absolute dollars, because a percentage of a small number is a small number. This is the case most fee comparisons ignore, and it describes most households in this county.
- You want someone managing it, not advising you about it. AUM, since discretionary management is what the model was built for.
What we do, and why
We charge 1.5% to 2.0% of assets under management, set within that range by your situation and by the adviser handling it, disclosed in writing before you engage. There is no minimum to open, and $50 a month thereafter.
The reason is the household this firm was built for. A flat fee of $3,000 is a rational price for complex work and an impossible one for someone with $20,000 and a first rollover to handle — and that person needs the advice more, not less. A percentage scales down to nearly nothing at the bottom, which is the only way to serve that household without pretending the work is free. Why we open accounts at $0 →
The trade-off is that a percentage scales up, and above a certain balance a flat fee would serve you better. If that is your situation, we will say so.
Common questions
Is a flat fee always cheaper?
No — it depends entirely on the balance. Below roughly $200,000, a percentage is usually cheaper in dollars than any flat fee an adviser can profitably offer. Above roughly $1 million, the flat fee usually wins. Do the arithmetic on your own number rather than the principle.
What is a fee-only adviser?
One paid only by clients, with no commissions or product revenue from anyone. It describes the source of the money, not the structure. All three models above can be fee-only. Fee-only vs fee-based vs commission →
Are advisory fees negotiable?
Often, and it is a fair thing to ask. An adviser's Form ADV Part 2A, Item 5 says whether and on what basis. Ours is public at adviserinfo.sec.gov.
Are advisory fees tax-deductible?
Not for individuals at present — the deduction for investment advisory fees was suspended for tax years 2018 through 2025 and you should confirm the current position with your CPA. Fees paid from within a business retirement plan are treated differently. This is not tax advice.
Run our fee against your own number
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