Clear Money Guide
What this guide covers
A quick view of the questions and evidence developed below.
Comparison tables scroll horizontally on smaller screens.
Short answer: With common tiered AUM schedules (1.00% on the first $250k, 0.75% on the next $250k, 0.50% above) and low-cost ETFs (~0.06% ER), a $3,000 flat-fee is typically cheaper than AUM at $500k and $1M portfolios. Your break-even depends on your firm’s tiers—run your exact numbers in the AUM Fee Calculator.
Assumptions used in the examples
- Portfolio sizes: $500,000 and $1,000,000
- AUM tiers: 1.00% (first $250k), 0.75% (next $250k), 0.50% (above $500k)
- Flat-fee quote: $3,000/year
- ETF expense ratio: 0.06% (6 bps)
- Platform fee: 0 bps (add it in the calculator if your firm charges one)
Flat-Fee vs AUM at $500k and $1M (All-In Costs)
| Scenario | All-in annual cost |
|---|---|
| AUM @ $500k Advisory $4,375 + ETFs $300 | $4,675 |
| Flat-fee @ $500k Flat $3,000 + ETFs $300 | $3,300 |
| Savings @ $500k | $1,375 cheaper with flat-fee |
| AUM @ $1M Advisory $6,875 + ETFs $600 | $7,475 |
| Flat-fee @ $1M Flat $3,000 + ETFs $600 | $3,600 |
| Savings @ $1M | $3,875 cheaper with flat-fee |
Numbers shown are examples—rates vary by firm. Use the calculator to model your tiers and any platform fee.
Quick takeaways
- At common AUM tiers, a ~$3k flat-fee wins at both $500k and $1M.
- If your firm adds a platform fee or has higher AUM tiers, AUM gets more expensive faster.
- Price isn’t the whole story—compare scope and service cadence too.
Run your numbers: Use the AUM Fee Calculator to test your firm’s exact tier schedule, ETF expense ratios, and any platform fee. It also estimates your break-even vs a flat quote.
Related reads
- AUM fees explained (tiers & breakpoints)
- Flat-fee financial advisor (what’s included + ranges)
- How much does a financial advisor cost?
- Find a financial advisor (hub)
Mini-FAQ
Is flat-fee always cheaper?
No. At smaller portfolios or with unusually low AUM tiers, AUM can match or beat flat-fee. Model your case in the calculator.
What does “all-in” include?
Advisory fee + underlying ETF/fund expense ratios + any platform/overlay fees. We exclude trading/tax impacts.
Can I negotiate AUM?
Often—ask for a lower tier or a fee cap. See our negotiation scripts and use the calculator to show your break-even.
Figures verified against the Clear Money Guide 2026 Advisor Fee Benchmark v1.1 (Zenodo DOI 10.5281/zenodo.21762538) and the page’s own tier arithmetic recomputed from its stated inputs on September 30, 2026.
What firms actually disclose at this balance. In our own benchmark of published adviser fee schedules, the weighted median annual cost at $500,000 is $3,750 to $5,000, taken from the Form ADV Part 2A filings of 176 SEC-registered advisers. The full benchmark, with method.