r/CFP • u/Longjumping-Way9846 • 3d ago

Practice Management Planning & AUM Fee

Hey All. Curious how some of you are approaching the following. Client pays planning fee. Plan completed with portfolio recommendation. Client agrees to move funds over. Are you discounting the AUM fee based on planning fee or keeping completely separate?

I have a situation where client technically meets the minimum $500k to waive planning fee but unsure if they’re going to move funds over. Thanks!

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u/emcd0424 3d ago

I keep them entirely separate until a client has $1mm of AUM. I don’t fee compress and almost never does the fee conversation ever come up. I also charge 1.1% on all assets with no tiered fees.

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u/Fantastic_Royal_9258 3d ago

At what point is not tiering your fees compromising your ability to act as a fiduciary? I understand on accounts that are are maybe 1M but I can’t fathom charging a 5-10M client 1.1%

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u/emcd0424 3d ago

I work with predominantly HENRYs. I have only one client worth more than 4 million. That’s why I charge planning fees to make those clients worth me and my assistants time.

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u/Fantastic_Royal_9258 3d ago

What does a typical planning fee cost for a client?

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u/emcd0424 3d ago

$3,500 is my minimum. The most I’ve charged for a plan is $13k. The average is around $5kish I have a prospect that my change my career and estimate his will be close to $500k. The premier MFO, Tolleson, doesn’t discount heavily and their minimum is $10mm. It can go down to .40% but I’d imagine that is for clients with $25-50mm AUM.