Updated July 29, 2026. Quick answer: An inheritance creates a burst of decisions, not a permanent stream of them. AUM pricing charges a percentage of the balance every year forever; hourly and project pricing charge for the work and then stop. On a 20-year view the model, not the advisor, drives most of the cost difference — and on most inheritances the work genuinely finishes.
Which of the decisions actually recur
| The work | Finite or ongoing? |
|---|---|
| Deciding an allocation for the lump sum | Finite |
| Setting a drawdown schedule for an inherited account | Finite — decided once, then executed |
| Consolidating and retitling accounts | Finite |
| Unwinding a concentrated position | Finite, if on a plan |
| Deciding whether to keep or sell property | Finite |
| Rebalancing a portfolio | Ongoing, and largely automatable |
| Continuous planning as your life changes | Genuinely ongoing |
Count the rows. Five of the seven finish. If most of what you need done is on the finite side, an arrangement that bills annually forever is priced for a different problem than the one you have. That is not an accusation of bad faith — it is what the model is for. The mismatch is the point.
What the difference is worth
On $250,000 over twenty years, a 1% annual fee costs $82,665 in fees paid and $123,466 in ending balance. A finite engagement priced in hours or as a project costs a fraction of that, once, and does not compound. That is the entire comparison, and it does not require anyone to be better at investing than anyone else — the arithmetic is in the fee, not in the performance.
The assumptions, so you can disagree with them. 6% gross annual return, a 1.00% advisory fee charged each year on the running balance, and 0.10% as the cost of holding a broad index fund yourself. Change any of the three and the numbers move — the point is the shape, which does not.
When AUM is the right answer anyway. If you want somebody continuously responsible — not consulted, responsible — that is a real service and a percentage is a coherent way to buy it. It also self-enforces: people who intend to review a plan annually mostly do not, and paying for it is a commitment device. The honest version of the question is whether you are buying a decision or a relationship.
The practical catch at smaller balances
Hourly and project-priced planners are less numerous than percentage-based firms, and the firms most willing to take a one-time engagement are often not the ones advertising. At smaller balances you may also be below a firm’s asset minimum, where an annual minimum fee pushes the effective rate above the headline percentage — which makes the finite engagement more attractive rather than less.
Whether you need any of it depends on what the inheritance consists of, and the timing question has its own answer — hiring and deploying are two different clocks.
Run your own numbers. Hourly scope estimator — estimate the hours a real engagement takes.
Sources
Arithmetic computed for this page on the stated assumptions and recorded at context/project/inherit_fee_math_20260729.json — 6% gross annual return, a 1.00% advisory fee charged annually on the running balance, and a 0.10% self-managed cost. These are inputs, not forecasts, and not a claim about any firm’s schedule. Fee-level context: our own AUM fee pages. Every tax rule referenced is linked to the page that carries it rather than restated here.
This is arithmetic and decision framing, not tax, legal or investment advice. Nothing here states a tax deadline or a filing requirement — where one matters, the link goes to the page that carries it. Your own answer turns on what the inheritance consists of and on facts no page can see.