On a household with $450,000 of investable assets, a 1% fee and the median flat planning fee of $4,500 a year bring in the same revenue. Above that, an asset fee earns more per client and rises with markets. Below it, a flat fee earns more, and it lets you serve households an asset fee can’t pay for. Choosing between them is less about which earns more and more about which clients you want, how your revenue behaves in a bad year, and how you’ll raise prices.
The numbers here come from the Wellspent fee report: 62% of fee-only firms charge a percentage of assets, with a median first-tier rate of 1%, and 48% offer an ongoing planning fee, with a median of $4,500 a year.
Revenue per client, by household size
The chart applies a flat 1% to keep it simple. Many firms lower the rate above $1 million or $2 million, which narrows the gap at the top. The pattern holds anyway: an asset fee concentrates revenue in your largest households, and a flat fee spreads it evenly across clients.
That shapes the firm you end up running. Under an asset fee, a few large households can carry the business, and capacity goes to them. Under a flat fee, revenue tracks client count and price, so you either serve more households or charge more for complex ones. Flat-fee firms usually tier by complexity for this reason; see how to price financial planning.
Revenue over time
An asset fee grows on its own. A flat fee grows only when you raise it.
$1M growing 6% a year before a 1% fee, against the October 2026 median flat fee
Source: Wellspent calculation from fee report medians
Data
| Year | 1% of a $1M household | $4,500 flat, raised 3% a year | $4,500 flat, never raised |
|---|---|---|---|
| 0 | $10,000 | $4,500 | $4,500 |
| 1 | $10,500 | $4,635 | $4,500 |
| 2 | $11,025 | $4,774 | $4,500 |
| 3 | $11,576 | $4,917 | $4,500 |
| 4 | $12,155 | $5,065 | $4,500 |
| 5 | $12,763 | $5,217 | $4,500 |
| 6 | $13,401 | $5,373 | $4,500 |
| 7 | $14,071 | $5,534 | $4,500 |
| 8 | $14,775 | $5,700 | $4,500 |
| 9 | $15,513 | $5,871 | $4,500 |
| 10 | $16,289 | $6,048 | $4,500 |
On those assumptions (a $1 million household, 6% yearly growth before the fee, and the October 2026 median flat fee of $4,500), the asset fee brings in about $126,000 over 10 years. The flat fee brings in about $52,000 with a 3% raise each year, and $45,000 with none. Real markets don’t rise 6% every year, but the direction is right: asset fees carry built-in raises, flat fees don’t.
One advisor on r/CFP put the fix plainly: “I strongly recommend you build in automatic increases for inflation. AUM client fees naturally grow over time due to market growth” (thread). Write the increase into the agreement from day one.
Revenue in a down year
The same mechanism works in reverse. When a portfolio falls 20%, the asset fee on it falls 20%: a $10,000 fee becomes $8,000, in the quarter when clients call most and need the most reassurance. A flat fee doesn’t move. For a firm with most of its revenue in asset fees, a bear market cuts income and raises workload at the same time. For a flat-fee firm, the risk is different: it loses revenue only when clients leave.
Which clients each model can serve
An asset fee needs assets you can manage. That leaves out three kinds of households that often want advice the most:
- High earners who haven’t saved much yet, such as doctors early in their careers, tech employees with equity pay, and business owners whose wealth is in the business.
- Households whose money is in workplace plans you can’t manage, like 401(k)s and pensions.
- People who invest on their own and want planning, not management.
A flat fee serves all three, and a flat-fee firm has no revenue reason to set an asset minimum. Of the 781 US firms in the fee report that state a minimum, 50% say they have none. See should you have an asset minimum?
How many clients you need
The model also sets the size of the client list behind a revenue goal. Say a solo firm wants $450,000 a year in fees. At 1%, that’s $45 million under management: 45 households at $1 million, or 90 at $500,000. At the October 2026 median flat fee of $4,500, it’s 100 households, whatever their assets.
Those are very different firms. Forty-five large households leave time for deep work with each one, but losing two of them costs $20,000 of revenue. A hundred flat-fee households spread the risk, but they need a tighter service model: fixed meeting schedules, templated deliverables, and a clear line on what’s included. Before you choose, work out how many hours a year your typical client takes, and check that the client count your model implies fits in your calendar.
Clients are asking for it, too. One of the three questions in our AI recommendations study asked assistants for “a flat-fee financial advisor … not one who charges a percentage of assets.” Prospects who phrase it that way are filtering out asset-fee firms before they read a single website.
What a referral costs under each model
Your fee model also changes what some referral services take. Zoe Financial’s disclosure says its referral fee is 15% to 35% of the client’s advisory fees. On asset-based fees it’s paid for the entire relationship; on fixed-fee planning, for the first five years (Zoe disclosure, last updated March 2025). On a large household paying 1%, that’s a share of a growing fee for as long as the client stays, unless you buy it out on the contract’s terms. See Zoe Financial’s revenue share explained.
Hybrids most firms actually run
Few firms pick one model outright. Common middle paths:
- An asset fee with a cap. “I have seen AUM advisors also cap their fees. So follows normal schedule until 25k or something like that,” one advisor wrote (thread).
- A planning fee plus a lower asset fee, so planning is priced on its own and management is priced for the work and liability of running money.
- A flat fee that includes management, quoted in dollars, often in complexity tiers.
- Two menus: an asset fee for households who want management, a flat fee for those who don’t.
Switching an existing book
Moving a large existing household from 1% to a flat fee below its current asset fee is a pay cut, and advisors know it. Asked how firms convert a book, one replied: “I would say that would be rare because in most cases the advisor would be taking an unneeded pay cut” (thread). The usual route is to launch the flat fee for new clients, offer it at each client’s yearly fee review, and let the book shift over time. Each of these quotes is one advisor’s experience.
The short version
| Asset fee (1%) | Flat fee | |
|---|---|---|
| Revenue per client | Rises with household size | The same at every size, unless tiered |
| Same revenue at | $450,000 | $450,000 |
| Growth | Grows with markets | Grows only when you raise it |
| Down year | Falls with the portfolio | Unchanged |
| Clients it can serve | Households with assets to manage | Anyone, including high earners with few assets |
| How prospects compare it | A percentage, hard to picture in dollars | A dollar price, easy to compare |
Where Wellspent fits
Whichever model you choose, Wellspent never takes a share of it. A membership is $89 a month: a verified record in the public graph at find.wellspent.co with your fee model and prices, introductions from prospects with no lead fees, a monthly report on who AI assistants recommend in your market, and quarterly press placement with media partners. See how it works.