From the Flat-Fee Pricing hub — Evergreen Wealth Management — flat-fee fiduciary planning for Massachusetts retirees and pre-retirees.

If you are researching financial advisors, one of the most important decisions you will make is not who to hire — it is how they charge. The fee model your advisor uses affects everything from their incentives to your long-term wealth. In this guide, we compare the two most common pricing structures: flat-fee and AUM (assets under management) advisory fees.

What Is an AUM Fee?

An AUM fee is a percentage of the total assets an advisor manages on your behalf. The industry standard is typically around 1%, though some advisors charge between 0.5% and 1.5% depending on portfolio size and services included. If you have a $1.5 million portfolio and your advisor charges 1%, you pay $15,000 per year in advisory fees.

The AUM model has been the dominant fee structure in the financial advisory industry for decades. It was originally designed to align advisor incentives with client outcomes — the idea being that if your portfolio grows, the advisor earns more, so they are motivated to grow your wealth.

What Is a Flat-Fee Financial Advisor?

A flat-fee financial advisor charges a fixed amount — typically a monthly or annual fee — regardless of how much money you have invested. This fee covers all planning, investment management, and advisory services. At Evergreen Wealth Management, for example, the flat monthly fee is a flat monthly fee, which covers comprehensive financial planning, tax strategy, and investment management for any portfolio size.

How Do the Costs Compare Over Time?

The difference between these two models becomes dramatic over time. Consider a couple with $1.5 million in retirement savings. Under a 1% AUM model, their fees start at $15,000 per year and grow as their portfolio grows. Under a flat-fee model at a flat monthly fee, their costs are predictable and lower from day one. Over 30 years, assuming 7% average returns, the AUM client could pay over $700,000 more in fees than the flat-fee client — even though both receive similar services.

When Does an AUM Advisor Make Sense?

The AUM model can be reasonable for investors with smaller portfolios (under $500,000) where the dollar amount of the fee is relatively modest. It can also make sense when the advisor provides a genuinely comprehensive suite of services that includes tax planning, estate coordination, and insurance review — not just portfolio management. However, many AUM advisors primarily manage investments and charge the same percentage whether they do extensive planning or minimal work.

When Does a Flat-Fee Advisor Make Sense?

A flat-fee model is typically the better choice for families with more than $500,000 in investable assets, households that want comprehensive planning beyond just investments, people who value fee transparency and predictability, anyone who has calculated the long-term cost of their current AUM fee, and professionals with complex financial situations like stock compensation or multiple income sources. The flat-fee model removes the conflict of interest entirely — your advisor has no incentive to recommend strategies that increase the assets they manage.

What Questions Should You Ask When Comparing Advisors?

Whether you are considering a flat-fee or AUM advisor, ask these questions: What is included in your fee? Are there any additional charges for financial planning, tax projections, or estate reviews? Are you a fiduciary 100% of the time? How do you get compensated — do you earn commissions on any products? What is the total dollar cost of your services over the next 10 years? And how would your advice change if I moved half my assets elsewhere? The answers to these questions will tell you more about an advisor than any credentials on their wall. For a deeper look at how to evaluate and compare advisors, see our guide to choosing the right financial advisor.

The Bottom Line

Both fee models can work, but they are not equal for every situation. If you have accumulated significant wealth and want comprehensive financial planning at a fair, predictable price, the flat-fee model is worth serious consideration. The math consistently favors flat-fee clients over the long term, and the alignment of incentives creates a healthier advisor-client relationship.

At Evergreen Wealth Management, we offer flat-fee financial planning starting at a flat monthly fee. You can see a full breakdown of our flat-fee pricing and exactly what is included. Schedule a free introductory call to learn how our approach compares to your current advisory arrangement.

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Flat-Fee vs. AUM Financial Advisor: Which Fee Model Is Better for You?