top of page

Assets Under Management: The Gollum Effect

Few clients should pay for asset management so why are there so many AUM advisors?

Financial writer Bob Veres has been blogging lately about the chaos that exists in the pricing of financial planning services among fee-only advisors. He questioned why we haven’t come up with a more standardized approach.

In case you haven’t been exposed to the basic array of pricing options, I’ll summarize: the majority of fee-only advisors operate under an Assets Under Management (AUM) model where the client pays anywhere from 0.25% to 2% of their investable assets every (freaking) year in advisory fees. In exchange, the advisor will most definitely focus on investments and may offer to include a comprehensive plan for free or for an additional fee. There are, of course, other advice models – including flat-fee or hourly, but these last two represent a tiny percentage of the fee-only advisor market. Flat-fee and hourly advisors will also offer guidance on investments but are likely to place the same emphasis on comprehensive financial planning. You know, mundane things like goal setting, budgeting, long term care planning, whether or not you should refinance and which pension option is best for you.

1 view0 comments


bottom of page