Why I don't charge based on portfolio size

The work of retirement planning doesn't grow in proportion to your portfolio balance. Coordinating Social Security, managing taxes, reviewing Medicare, and building a withdrawal strategy takes roughly the same effort at $1.2 million as it does at $2 million. Charging a percentage of assets ties your fee to a number that doesn't reflect the complexity of the work, and it creates a quiet incentive to prioritize portfolio growth over everything else. A flat annual fee aligns what I charge with what I actually do.

People ask me a version of this question a lot: why don't you charge a percentage of assets like most advisors? It's a fair question, and I want to answer it honestly rather than give you a polished pitch.

The most common way financial advisors charge is a percentage of your invested assets, typically around 1% per year, according to Kitces Research's 2024 advisor fee survey. I used to work inside that model. I understand why it exists, and I can see its logic. But after working with retirees and people approaching retirement, I don't think it serves them well. So when I built Your Path Fi, I chose a flat annual fee instead.

This isn't a marketing position. It's a genuine view about how advisors should be compensated, and I want to explain my thinking honestly.

The work of retirement planning doesn't scale with your balance

Think about what retirement planning actually involves. The work I do for someone with a $1.5 million portfolio is essentially the same as the work I do for someone with a $2.5 million portfolio. Both need Social Security timing analysis. Both need a withdrawal strategy that manages taxes across accounts. Both need help thinking through Medicare costs, healthcare coverage, and estate coordination. Both need investment oversight suited to their specific timeline and spending needs.

The complexity of that work is driven by your life, not your balance. How many income sources you have, how your accounts are structured, what your tax situation looks like, when you plan to retire, what you want your money to do. Portfolio size plays into some of those decisions, but it doesn't determine how much time or attention the plan requires.

If I charged a percentage of assets instead, the fee for the larger portfolio would be automatically higher, even if the actual planning work is the same. That math doesn't sit right with me.

A percentage fee creates a quiet conflict of interest

I want to be careful here, because I am not saying that AUM-based advisors are dishonest or don't care about their clients. Many genuinely do. But the structure creates a subtle tension that is worth naming, because you deserve to understand the incentives of the person you are trusting with your retirement.

If my fee is a percentage of your invested portfolio, then my revenue grows when your portfolio grows, and shrinks if you spend it down. That means there is a financial incentive, even an unconscious one, to favor keeping assets invested over strategies that involve drawing down the portfolio intentionally. Roth conversions, spending from savings in specific years to manage taxes, or strategies that reduce portfolio balance in exchange for better long-term outcomes could all look less favorable through that lens.

With a flat fee, my compensation doesn't change based on your balance. If a Roth conversion that reduces your taxable account this year makes sense for your tax situation over the next decade, I have every reason to recommend it and no financial reason to avoid it. The advice can follow your plan, not the fee structure.

Retirees often pay the most, at the moment cash flow matters most

If you are close to retirement or already there, you have probably spent decades building what you have. Your portfolio balance is likely near its peak, before withdrawals begin in earnest. That is also, not coincidentally, when AUM fees reach their highest dollar amount.

For people already retired and those approaching retirement, paying 1% of a $1.5 million or $2 million portfolio means $15,000 to $20,000 per year deducted directly from your account, every year. And unlike a flat fee, that number grows automatically as markets rise, regardless of whether the advisor's workload increases at all.

These are also the years when every dollar of outflow matters most. You are managing withdrawals carefully, watching for tax triggers, and trying to make your savings last as long as you need them to. A fee that rises automatically, tied to a balance rather than to a defined scope of work, runs counter to that goal. That tension is worth being clear-eyed about.

What a flat fee actually means in practice

At Your Path Fi, the fee is $12,000 per year. That covers comprehensive financial planning and investment management: retirement income strategy, tax planning, Social Security analysis, Medicare guidance, investment oversight, and estate coordination. One number. No percentage on top.

For a fuller look at what those services include individually, see the services overview. The short version: everything involved in building a retirement plan and keeping it on track is included in that flat annual fee.

A flat fee makes the cost transparent and predictable. You know what you are paying and what it covers. You also don't have to wonder whether a recommendation is right for your plan or right for keeping assets under management. That is a more comfortable place to receive advice from, in my view. That said, if you ask me whether a flat fee is always the right structure for everyone, I'll tell you it isn't.

When an AUM fee might actually cost less

The flat fee vs. percentage financial advisor question has an honest answer: it depends on your portfolio size. For clients with smaller portfolios, a 1% AUM fee can be less expensive in dollar terms than a flat fee. At a $1 million portfolio, 1% is $10,000 per year, below our $12,000 flat fee. The break-even point for this specific comparison is around $1.2 million. Below that, AUM can cost less in pure dollar terms.

If that's your situation, I'll tell you that directly. My goal isn't to convince every prospective client that flat-fee pricing is always cheaper, because it isn't. My goal is to work with people for whom the flat-fee structure makes sense and where I can genuinely add value through comprehensive planning. See the full flat fee vs. AUM cost comparison if the math matters to you.

As a flat-fee based financial advisor, I also think about the incentive structure beyond the immediate dollar comparison. As your portfolio grows over time, your AUM fee grows with it automatically. Your flat fee doesn't. That's not a projection of what will happen to your specific portfolio. It's just how the math works, and it's worth understanding before you choose a fee structure.

Frequently asked questions

Why don't you charge a percentage of assets?

Because the planning work involved in retirement, Social Security analysis, tax strategy, Medicare guidance, withdrawal sequencing, takes roughly the same effort regardless of portfolio size. Charging a percentage means the fee for a $2 million portfolio is automatically double the fee for a $1 million portfolio, even when the work is the same. A flat fee reflects the scope of the work, not a number that changes automatically when markets move.

Is a flat fee always cheaper than a 1% AUM fee?

Not always. For portfolios below roughly $1.2 million, a 1% AUM fee may cost less in dollar terms than Your Path Fi's $12,000 flat fee. Above that level, the flat fee is typically less expensive, and the gap widens as the portfolio grows. The honest answer is that it depends on your portfolio size.

Does a flat fee mean Ryan has less incentive to grow my investments?

The goal is still sound investment management that serves your plan. The difference is that investment recommendations aren't shaped by a fee structure that rewards keeping assets invested above other strategies. If a Roth conversion, a spending strategy, or another approach makes sense for your plan, the flat fee removes a financial reason to avoid it.

What does the $12,000 flat fee cover?

Comprehensive financial planning and investment management: retirement income strategy, tax planning, Social Security analysis, Medicare guidance, investment oversight, and estate coordination. There is no percentage-of-assets fee on top of that.

What is the difference between a flat-fee based financial advisor and an AUM advisor?

A flat-fee based financial advisor charges a fixed annual dollar amount regardless of how much you have invested. An AUM advisor charges a percentage of your portfolio, typically around 1%, so the dollar amount grows automatically as your balance grows. The key difference isn't just cost, it's the incentive structure: a flat fee removes the financial pressure to prioritize portfolio growth over other planning strategies that might serve you better.