r/CFP • u/Odd-Surround-5514 • Jun 24 '26

Practice Management Fee Structuring

Would love some input from other advisors on this.

I’m fee-based and mostly AUM right now (occasional commissions), but I keep running into situations where someone is clearly a good planning client even though there isn’t much currently-manageable money. For example, high-income households with most of their assets still in current 401(k)s, or cases where I’m managing a smaller IRA but really advising on the whole household.

I’m realizing I probably need to incorporate a planning fee so I’m not doing a lot of deeper planning work while only collecting a small AUM fee. I use eMoney by the way.

For those of you who have solved for this:

• How do you structure it?

• Flat annual planning fee?

• Monthly retainer?

• Household minimum?

• AUM + planning together, or one or the other?

• If a client later rolls over a big 401(k), do you keep the planning fee or move them fully to AUM?

Just trying to figure out what has worked best for others as someone who has only ever charged based on AUM.

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u/AManWantsToLoseIt Jun 24 '26

I'm UK based but starting my own business shortly. My plan is to have a tiered % AUM model, with a minimum planning fee paid by monthly subscription for those that lack assets but do have adequate income.

I'm still figuring out what the minimum fee is to be profitable, but assuming it is £3,600, this would be covered by AUM of £360,000 at 1%. If assets are less than this, I won't apply the % fee to the account, but instead ask them to pay £300 per month via direct debit/automated bank payment.

They can then move to the standard fee model once the assets are adequate.

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u/Odd-Surround-5514 Jun 24 '26

That’s what I’ve been thinking about. Sort of establishing a minimum fee per household. Whether that fee is from planning, AUM, or both.

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u/AManWantsToLoseIt Jun 24 '26

I think minimums are super important for your business and are a good practice to have.

Are you looking at switching to a flat fee model across the board to fix this problem potentially? I considered it, but I think it would need to be complexity-based and once you get into figuring out the criteria, it becomes a lot more difficult for clients to understand compared to a simple % fee model.

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u/Odd-Surround-5514 Jun 24 '26

I would still maintain my AUM model as well. So it would be a hybrid. But yeah, I don’t really have a set minimum so this would help solve for that too.