Flat-Fee vs. AUM: Why Your Financial Advisor’s Pricing Matters

TL;DR: The primary difference between a flat-fee advisor and an AUM (Assets Under Management) advisor is how you pay for advice.

A flat-fee advisor, like Simplify Financial, charges a transparent, fixed dollar amount for a financial plan. An AUM advisor charges a percentage (typically 1%) of your total investment portfolio every year.

What is a Flat-Fee Financial Advisor?

A flat-fee financial advisor is a Fee-Only Registered Investment Advisor (RIA) who charges a set price for a specific service or timeframe. Unlike traditional models, the fee does not increase just because your bank account does.

At Simplify Financial Planning, we offer two primary flat-rate services:

• Financial Checkup ($1,250): A one-time, 60-minute intensive session.

• Comprehensive Financial Plan ($3,000): A deep dive over three sessions covering everything from estate planning to tax strategy.

The Problem with the 1% AUM Model

Most traditional firms charge an AUM fee. While 1% sounds small, it creates a "wealth tax" that grows alongside your success. For a client with a $1,000,000 portfolio, a 1% fee equals $10,000 every single year, regardless of how much work the advisor actually performs. Furthermore, the AUM model creates a conflict of interest. If you ask an AUM advisor if you should use your cash to pay off your mortgage, their fee goes down if you take money out of your accounts. A flat-fee advisor has no such conflict; our advice is purely objective.

Feature	Traditional Advisor (1% AUM)	Simplify Financial (Flat-Fee)
Pricing Model	Percentage of Assets Managed	Fixed, Transparent Project Fee
Fee on $1M Portfolio	$10,000 / year (recurring)	$3,000 (one-time plan)
Asset Minimums	Often $500,000+	None (Open to everyone)
Conflict of Interest	Higher (Incentive to keep AUM)	Low (Advice is objective)
Portfolio Control	Advisor manages and trades	Self-directed (You own the keys)
Investment Style	Often proprietary/complex	Low-cost Index Funds & ETFs