Advisors have traditionally found it straightforward to advocate for fees tied to clients' portfolio sizes, using the rationale that asset-based fees correlate with portfolio balances, thus implying their motivation to grow portfolios.

An InvestmentNews Benchmarking Study finds that, among SEC-registered RIAs managing at least $100 million, a significant 98.7% employ asset-based fees, varying from 40 basis points to over 1% based on account size, relationship, and services. Although few advisory firms publish their fees openly, and discounts are prevalent, the starting point for asset-based advice has remained around 1% since the early 1990s.

Despite the industry's apparent dedication to asset-based fees, more is happening beneath the surface. RIAs are embracing various fee models to attract and retain clients. The InvestmentNews report states that 77% of SEC-registered RIAs provide fixed fees, 62% offer hourly fees, and 4% utilize commissions. Devin McGinley, InvestmentNews's Director of Research, emphasized that while AUM fees still dominate the advice industry's economics, the significant use of fixed fees alongside AUM fees—by three-quarters of firms. 

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