The second model of flat fees is tiered to rise with AUM, etc. So wealthier individuals pay higher fees with higher AUM-just not a direct proportion. Again, the flat fee might exceed proportional AUM charges in “down” years.
That is similar to ours, in a way, except as follows:
- Basic Tier: $5k/yr - ongoing comprehensive flat fee financial planning, no asset management but portfolio advice (client implements) for all investments (including employer accounts)
- Premium Tier: $10k/yr - same as Basic except investment management up to $1M + quarterbacking with client advisors (attorney and insurance, for example) + additional meeting before Initial Foundation Plan.
- Concierge Tier: $15/yr - same as Premium but adds personal tax preparation and includes asset management above $1M. At the time, we have no cap on total investments managed, because we haven’t needed to for the reasons cited above - we just don’t see the added complexity for $1M versus $5M. I’m not promising that we won’t get a client with such complexity (15 different accounts with multiple transactions, comples trusts, 100+ real estate properties, etc.) that we won’t have to adjust on a per-case basis, but that would be disclosed in advance so the prospective client could make an informed decision.
To me, this is the most fair to both the advisor and the client.
I don’t think it will be possible to find a system that is perfect for everybody - you have to find what works for you and your clients and go with it. If Steven Podnos’s system works for him, I have no problem with it. Ours works for us, and everybody is free to set up their business in such a way as to profit from it and enjoy what they do. If it is a bad system, clients will leave and the business owner will make changes. That’s the supply and demand system I learned as an Econ minor in college 42 years ago. I don’t remember much else

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