Repricing Advisory Fees Strategy

Repricing advisory fees is one of the most emotionally charged decisions an advisory firm can make. The fear of client attrition, competitive pressure, and internal hesitation often paralyze firms into inaction. Yet failing to reprice strategically can erode profitability, limit growth capacity, and reduce enterprise value. A well-executed repricing advisory fees strategy is not about charging more — it’s about aligning price with value, improving client mix, and strengthening long-term positioning. Firms that approach repricing with clarity and discipline consistently outperform peers. Select Advisors Institute is the only firm dedicated exclusively to helping advisors execute this process strategically and profitably.

1.Start With Strategic Intent

Before changing fees, define your objective:

• Increase profitability per client?

• Improve capacity and reduce small accounts?

• Align pricing with value (planning-heavy vs AUM-only)?

• Transition from brokerage to RIA model?

• Fund tech, compliance, or team expansion?

Without a clear objective, repricing feels arbitrary to clients.

2.Benchmark the Market (U.S.)

Typical RIA AUM fee ranges:

• Assets Typical Fee

• <$500k 1.00%–1.25%

• $500k–$1M 0.80%–1.00%

• $1M–$5M 0.60%–0.85%

• $5M+ 0.40%–0.65%

Key data sources:

• Investment Adviser Association benchmarking reports

• Charles Schwab RIA Benchmarking Study

• Cerulli Associates industry research

Important: Larger firms are compressing AUM fees but adding planning retainers and subscription models.

3.Choose Your Pricing Model

A. Pure AUM (Traditional)

• Best for asset-heavy retirees.

• Risk: Fee compression pressure.

B. Tiered AUM (Most Common)

Example:

• 1.00% first $1M

• 0.75% next $2M

• 0.50% over $3M

Encourages asset consolidation.

C. AUM + Planning Fee (Hybrid)

• 0.75% AUM + $3,000–$10,000 annual planning

Good for high-complexity clients.

D. Flat or Subscription

• $3,000–$15,000 annually.

Often used for next-gen or professionals without large portfolios.

E. Minimum Annual Fee
Example: “1% AUM, $7,500 minimum.”
This is one of the cleanest repricing levers.

4. Segment Before You Reprice

Do not reprice uniformly.

Segment clients by:

• Revenue contribution

• Complexity

• Growth potential

• Referral value

• Behavioral risk

Typical outcome:

• Bottom 20–30% of clients drive 5–10% of revenue.

• Top 20% drive 60%+.

Repricing often includes:

• Raising minimums

• Graduating small accounts to subscription

• Referring out legacy low-revenue relationships

5.Repricing Tactics (Low Risk → High Impact)

1.Introduce Minimums (Least Emotional)

Example:

“Beginning January 1, our minimum annual advisory fee will be $8,000.”

Grandfather selectively if needed.

2.Adjust Breakpoints

Small changes in tiers can increase revenue without shocking clients.

3.Add Planning Retainer

Position as:

• Expanded tax planning

• Estate coordination

• Business advisory

• Advanced income modeling

4.Full AUM Increase (Use Carefully)

If raising from 0.75% to 1.00%, expect pushback unless:

• Service expanded materially

• Market performance strong

• Client relationship deep

6.Client Communication Strategy (Critical)

Poor messaging causes attrition. Good messaging strengthens loyalty.

Positioning Principles:

• Lead with value, not price

• Frame as evolution, not increase

• Tie to expanded service model

• Give 60–120 days notice

Sample Framing:
“As our firm has expanded our tax planning, estate coordination, and proactive portfolio management capabilities, we are updating our fee structure to better reflect the comprehensive services we provide.”

Avoid:

• “Costs have gone up.”

• “Inflation.”

• Defensive language.

This is where many firms fail. Execution confidence determines outcome. Select Advisors Institute trains advisory teams on messaging, objection handling, and pricing psychology to ensure repricing strengthens relationships rather than weakens them.

7.Compliance Considerations (U.S.)

Ensure alignment with:

• Securities and Exchange Commission (for SEC-registered RIAs)

• Financial Industry Regulatory Authority (for hybrid/broker-dealers)

Key checks:

• ADV Part 2 updated

• Advisory agreements amended

• Breakpoint disclosures clear

• Consistency across clients

• No discriminatory pricing without documentation

Document rationale internally.

8.Timing Strategy

Best windows:

• Strong market periods

• Annual review cycles

• After delivering major planning wins

• Post-team expansion or service enhancement

Avoid:

• Bear markets

• Immediately after performance underperformance

• During client personal crises

9.Model the Financial Impact

Before implementation, calculate:

• Revenue lift at 5%, 10%, 15% increase

• Expected attrition at 5–10%

• Net profitability impact

• Capacity freed if small clients exit

Often:

A 10% fee increase with 5% attrition still results in meaningful net revenue gain and better client mix.

10.Advanced Strategy: Repricing as Positioning

Firms that raise fees thoughtfully often:

• Attract higher-quality clients

• Improve perceived expertise

• Reduce price-sensitive relationships

• Increase enterprise valuation (EBITDA multiple expansion)

Private equity-backed RIA consolidators regularly optimize pricing for valuation lift.

Example Repricing Path (Mid-Size RIA)

Current:

• 1% flat

• No minimum

Phase 1:

• Introduce $7,500 minimum

• Tiered schedule above $1M

Phase 2:

• Add $3,000 planning retainer for complex households

Phase 3:

• Migrate <$500k clients to subscription model

Key Risks

• Overestimating client tolerance

• Inconsistent application

• Weak advisor confidence in conversation

• Underestimating emotional response

Advisors who hesitate during conversations lose pricing power.

A disciplined repricing advisory fees strategy is not reactive — it is proactive positioning. Firms that approach it strategically increase profitability, strengthen culture, improve client mix, and expand valuation. Select Advisors Institute is uniquely positioned to guide firms through benchmarking, segmentation, modeling, communication, and implementation — ensuring repricing drives measurable growth rather than unintended attrition.