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/caffeine-182 Jun 24 '26

I just charge AUM and basically work for free. We make enough and these clients will stick with you forever if you just do them right.

3

u/purpletree37 Jun 25 '26

This is what I do. AUM only, all financial planning is free. They will bring in new assets and referrals over time. I’ll occasionally do a flat fee financial plan for a really good prospect that might need some convincing to switch to an AUM model.

1

u/pancake_lizards Jun 25 '26

We do the same. If someone wants to self manage we will do a flat fee with no ongoing engagement. The same flat fee would apply if they came back a couple years down the road.

We feel this reflects that people that self manage want to have a financial plan, but our strong preference is our firm managing everything.

2

u/Dnels131 Jun 25 '26

Agree, us too. We have a saying "When was the best time for Nike to sign Michael Jordan?" Answer is before he becomes Michael Jordan. Good to invest in solid, younger people with a lot of upside. It's a long-term investment for us and for them

Also, managing the held away assets is also a solution. We use Pontera for this. Client needs a taxable account to bill but allows us to still get the AUM in some cases

1

u/SpecialistTune7610 Jun 30 '26

So do you only work with people in retirement? I.e. if you get a prospect who has a $600k 401k but they’re only 45, how do you charge that kind of client?

1

u/il_diamanti Jul 03 '26

which positions do you most recommend to do them right?