An average account size of $835K. This study showed that average advisor fees were 0.65% (65 basis points) on assets under management.
Solo advisors took home an average $247,840 (including fees, commissions, deferred compensation and bonuses). Those advisors sharing the cost of resources, but not clients or revenues, fared the worst, with advisors in a siloed practice earning an average $196,975 in 2013. Team practices also serve bigger clients. According to the survey, the average account size for team practices is $1.3 million, compared to solo advisors, who report their average client account size is less than $500,000. But despite the higher compensation, advisors working on a team are less satisfied. Clients of between $1 million to $2 million came with an average fee of 1.17%, while $5 million-plus clients were charged 0.6% on average. However PriceMetrix said there is a wide disparity in the rates advisers are charging, even when factoring for differences in client size. With an account of $1-million or more, the average cost of a fee-based account falls to 0.93 per cent and the average commission-based account drops to 0.66 per cent. With less than $50,000, clients are on average paying a hefty 1.9 per cent in fee-based accounts and 1.02 per cent in commission-based accounts. ³ We used Betterment’s stated management fee of 0.15% for a $100,000+ account and a 0.99% management fee for advised portfolios, based on average fee provided in the PriceMetrix 2014 The State of Wealth Management 4th Annual Report. Costs may vary by provider. Evidence suggests that middle-income investors are losing too much to advisory fees. A study by PriceMetrix found that the average advisory fee for households with $250,000-$500,000 was 1.5%. 25% of clients were paying more than 1.75% and 15% were paying 2% or more! Their average advisory fee percentage is 1.30% and their average mutual fund and ETF expense ratio is 0.76% for a total fee of roughly 2%. 2% is not egregious if your portfolio is outperforming the market every year by 2% or more. One recent private study analyzed 340 passive and index investment advisors handling 23,000 portfolios with an average account size of $835K. This study showed that average advisor fees were 0.65% (65 basis points) on assets under management.
http://wealthmanagement.com/2014-compensation-survey/advisors-teams-make-more-money http://wealthmanagement.com/2014-compensation-survey/advisors-teams-make-more-money http://blogs.wsj.com/wealth-manager/2011/03/31/rates-vary-widely-as-more-advisers-use-fees/ http://www.theglobeandmail.com/globe-investor/investment-ideas/revealed-the-lowdown-on-adviser-fees/article536376/ https://www.betterment.com/resources/inside-betterment/compare-investment-management-fees/ http://www.flatfeeportfolios.com/investor-resource-center/fees-matter http://www.financialsamurai.com/average-adviser-fees-charged-by-brokerage/ http://www.cardiffpark.com/why-cardiff-park/advisor-fees
average advisory fee by account size