Short answer
There is no required way to price advisory services. The models in use fall into five groups: a percentage of assets, a flat fee, a subscription, a retainer, and an hourly rate. The rules decide what you must disclose and what you may not charge, not which model you pick. The main limit on the contract itself is that an SEC-registered adviser generally may not base its fee on a share of a client's capital gains or capital appreciation. [4]
The five models
| Model | How it works | What published data shows |
|---|---|---|
| Percentage of assets (AUM) | A rate times the assets you manage, usually lower on larger accounts (breakpoints) | Advisors' self-reported averages of 103.7 basis points at $750,000 and 88.1 at $1.5 million. [2] A 2026 survey puts the average AUM bundled fee at 0.96%, down from 1.05% in 2023. [3] |
| Flat fee | A fixed dollar amount per year or per project | Average $2,926, up 15% from $2,554 in 2023. [3] |
| Subscription | A fixed monthly fee for ongoing access | Average $595 a month, up from $215 in 2023. [3] |
| Retainer | An annual fee for ongoing planning | Average $6,815, up 52% from $4,484 in 2023. RIAs averaged $7,550 against $5,237 for non-RIAs. [3] |
| Hourly | A rate times the hours worked | We did not find a current published study of hourly rates, so none is shown. |
Treat these as reference points, not targets. The Envestnet figures come from a survey of 491 advisors, 291 reached through Envestnet | MoneyGuide's own outreach and 200 through the research firm, so they may not represent every kind of firm. [3] The Cerulli figures are advisors' self-reports, published in a Feb 2024 article. [2]
Breakpoints: how a sliding scale works
A sliding scale charges a lower rate as the account grows. It can work two ways. In a tiered schedule, each rate applies only to the dollars inside its band, so on a $2 million account the first $1 million is charged at one rate and the second million at the next. In a whole-account schedule, the rate for the band an account reaches applies to every dollar. The same schedule gives different totals under the two methods, so write down which one you use.
The fee revenue calculator runs both methods on your own client list and compares the result with a flat fee, showing the math.
Cerulli expects RIAs to raise fees for smaller clients and lower them for clients above $1.5 million. [2] In its survey, 46% of investors without an advisor named cost transparency as the hardest part of working with one, against 11% of the investors most reliant on an advisor. [2]
What Form ADV Part 2A requires you to say about fees
- Item 5.A: how you are compensated for advisory services, your fee schedule, and whether fees are negotiable. [1]
- Item 5.B: whether you deduct fees from client assets or bill clients, and how often. [1]
- Item 5.C: other fees or expenses clients may pay, such as custodian fees or fund expenses, and that clients will also bear brokerage and transaction costs. [1]
- Item 5.D: if clients may or must pay in advance, how a client gets a refund of a prepaid fee and how the amount is determined. [1]
- Item 5.E: if you or your supervised persons are paid for selling securities or other investment products, say so, explain the conflict of interest, and tell clients they can buy elsewhere. If more than 50% of your advisory-client revenue comes from commissions and similar pay, disclose that commissions are your primary compensation. [1]
- Item 6: if you accept performance-based fees, or run accounts with different fee types side by side, disclose it and explain the conflicts. [1]
- Item 18.A: if you require or solicit prepayment of more than $1,200 in fees per client, six months or more in advance, include a balance sheet for your most recent fiscal year, audited by an independent public accountant. [1]
The brochure is required under SEC rules and similar state rules, so state-registered advisers disclose fees the same way. [1] Retail clients also receive Form CRS, which summarizes fees, costs and conflicts. [5] [6]
Billing and custody
If you deduct fees from client accounts, you have custody under the SEC's custody rule, because custody includes any arrangement that lets you withdraw client assets by instruction to the custodian. When fee deduction is your only custody, the annual surprise examination by an independent accountant does not apply. [7] In the 2026 Envestnet survey, 79% of advisors collected fees through the custodian, up from 54% in 2023 and 27% in 2020. [3]
Check before you publish a schedule
- Make every document say the same thing. The brochure, Form CRS, advisory agreement and website should state the same fees. SEC examiners of newly registered advisers test whether an adviser's disclosures and filings match what it actually does. [6]
- Write a billing procedure. Examiners of newly registered advisers found compliance policies that did not adequately address risk areas such as fee billing. [6] See building a compliance program.
- Check any performance you show. If you advertise returns, the Marketing Rule requires net-of-fee performance alongside gross. [8] See the SEC Marketing Rule guide.
- Put the terms in the agreement. See legal essentials for an independent RIA.
This guide is educational, not legal or tax advice. Have your compliance consultant or securities counsel review your schedule and agreement.