Independent, fee-only advisors hear a lot about "fee compression." Yet most data shows the story is more nuanced. Headline assets-under-management (AUM) fees have generally trended down over the past decade, especially at higher asset levels, while planning fees have risen as firms expand their scope and deepen advice. The real challenge is not defending against a race to the bottom. It is building a pricing model that reflects your value, is easy for clients to understand, and leaves room to run a healthy business.
Here is a practical look at RIA fees today, with benchmarks, a simple pricing framework, and steps to communicate fees with confidence.
What RIAs Are Charging Now
You do not need to match the market, but you should know where it is. These ranges reflect public studies and industry experience. Your niche, complexity, and service model will drive where you land.
| Model | Where it fits | Typical range | Notes |
|---|---|---|---|
| AUM fee | Portfolio management plus ongoing planning | About 1% at $1M, higher at lower balances, tiered schedules | 1% at $1M remains common, but headline AUM rates have compressed over time, especially for larger portfolios; tiered schedules are prevalent, Cerulli |
| Flat annual retainer | Comprehensive planning for households with complex needs | Commonly $3,000 to $10,000 per year | Pricing typically reflects a clearly defined service calendar and deliverables; many firms use complexity tiers, Kitces Research on advisor pricing |
| Monthly subscription | Ongoing planning access for emerging or niche clients | Often around $375 per month on average, commonly paired with a setup fee | The median subscription fee in 2024 was $4,500/year, according to the Kitces Report. That equals ~$375/month. |
| Hourly | Project work or on-demand planning | $150 to $400+ per hour | Useful for narrow scopes or one-time needs |
| Project fee | Standalone plans or targeted engagements | Commonly $1,000 to $3,000 for a standalone comprehensive plan (higher for complex cases) | Clear scope and deliverables reduce rework, Kitces Research on advisor pricing |
While some sources caution that "fee compression" concerns are overstated, broader research shows persistent downward pressure on AUM fees, particularly for higher-asset clients, while planning fees are increasing as firms deliver more holistic value through deeper planning, tax strategies, and advice integration, according to Cerulli. That is good news for fee-only firms that lead with planning.
Pick Your Model Mix With Intent
There is no single right model. The wrong one is the model that does not fit your clients or your operations. Use your niche and your service promise to decide.
- Planning-first firm with modest AUM: consider a flat or subscription fee for ongoing advice, then charge a lower AUM fee or a platform fee for portfolios
- Complex wealth households: consider a flat annual retainer, complexity tiers, or a blended AUM plus flat planning fee to reflect deeper tax and estate work
- Startup or niche with variable needs: offer hourly or project fees alongside a subscription path for ongoing support
Mixing models is fine. Just keep the client's bill simple and predictable. One invoice, clear language, and no surprises.
A Simple Framework to Set RIA Fees
Price is a business decision, not a guess. Build from your cost-to-serve, capacity, and target margin.
1) Define your service and time
- List core deliverables across the year
- Estimate hours by role for onboarding, planning, investment work, and ongoing meetings
- Add a buffer for follow-ups and coordination
2) Calculate your fully loaded costs
- Direct labor: salaries and benefits by role
- Overhead: technology, compliance, rent, insurance, data
- Owner salary: pay yourself a market wage, separate from profit
3) Set your target margin
- Target 10 to 20 percent operating margin for a healthy practice, adjusted for growth stage
- Higher margins require pricing power or scale
4) Do the math
-
Calculate labor cost per hour by role, multiplied by the fully loaded hourly cost (for example, an advisor's fully loaded cost might be about $250 per hour). Add per-client software and overhead. To set a price for a 30 percent margin, use: Fee = Total Cost ÷ (1 − 0.30). Convert an annual fee to monthly by dividing by 12.
5) Sanity check against benchmarks
- Compare to peers in your niche and region
- Make sure the fee aligns with the outcome value, not just the activity
When and How to Raise Fees
Costs rise. Scope expands. Your expertise grows. If your pricing never changes, margins erode, and service suffers. Plan fee reviews.
- Set an annual review date for your schedule
- Use a standard policy for complexity upgrades, such as when equity comp, rental properties, or business owners enter the picture
- Automate cost-of-living adjustments on retainers when appropriate, then revisit every two to three years for a larger reset
Communicate early and clearly. Share the why and tie it to outcomes the client values. When raising your financial planning fees, preparation and transparency make all the difference.
We reviewed your engagement to make sure our pricing matches the ongoing work and results you expect. Over the past year we added proactive tax loss harvesting, RSU strategy, and quarterly planning check-ins. Beginning next quarter, your monthly fee will increase to reflect this work. This change keeps your plan fully supported and lets us continue to invest in great service. If you have questions, please call me. I am happy to walk through it.
Compliance Considerations You Cannot Skip
Pricing is a business decision. Billing is a compliance topic. Get the details right.
- Disclose fee schedules, billing frequency, calculation methods, and refund policies in your Form ADV and client agreements
- When deducting fees from client custodial accounts, send written, itemized invoices to clients and the qualified custodian, and maintain books and records
- Follow custody rules for fee deductions, including client authorization and notice requirements
- Prorate fees for partial periods and householding policies as disclosed
- Review your billing controls at least annually, then test calculations against client agreements
The SEC has highlighted common fee-billing errors, including misapplied breakpoints and incorrect prorations. Read the staff's risk alert, Division of Examinations Observations: Investment Advisers' Fee Calculations, and align your controls accordingly, SEC Risk Alert. For broader guidance on managing compliance as an independent financial advisor, start with a clear annual review process.
Make Billing Frictionless
Simplify how clients pay, and you reduce churn.
- Pick one primary billing cadence for planning fees, either monthly or quarterly
- Automate billing and collections for subscription and project work through compliant payment tools
- Consolidate AUM billing on a single schedule with clear, tiered breakpoints
- Send renewal reminders before charging planning retainers
If you serve fee-only planning clients without assets under management, use a payment platform built for advisory fee-for-service to manage invoicing, documentation, and audit trails. Connect it to your CRM and accounting system to avoid manual errors. Learn more about AdvicePay features that can streamline this process for your firm.
Avoid These Common Pricing Pitfalls
- Scope creep without price changes
- Intro discounts that never end
- Too many pricing options that confuse clients
- Complex tier schedules that are hard to audit
- No written policy for exceptions
A Fee Strategy That Grows With You
Strong RIA fees do three things: they match the client's perceived value, they are easy to explain in plain language, and they create room to invest in service and team. Start with your service model, build your price from costs and target margin, and review it on a set schedule. That is how you scale an advice-first, fee-only firm on your terms.
For a broader look at how to evaluate and increase your fees as a fee-for-service advisor, use data and peer benchmarks to guide every decision.
Key sources and further reading
- Kitces Research: Advisor fee models and what advisors charge – see the latest pricing studies at https://www.kitces.com/research/
- FPA Journal: Ongoing "Trends in Client Fees" research series https://www.financialplanningassociation.org/journal
- Cerulli press releases and insights on advisor pricing and fee compression https://www.cerulli.com/press-releases
- SEC Division of Examinations Risk Alert, Division of Examinations Observations: Investment Advisers' Fee Calculations https://www.sec.gov/files/exams-risk-alert-fee-calculations-2021.pdf
- Charles Schwab RIA Benchmarking Study https://www.aboutschwab.com/ria-benchmarking-study-2025
