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.
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.