Asset-based fees dwindle as firms price for complexity, not wealth

Asset-based fees are losing their grip on financial advice pricing, with the size of a client’s portfolio having significantly less influence on what advisers charge now than it did three years ago, new research has found.

Vital Business Partners’ 2026 Advice Fee Benchmarking Report, based on a confidential survey of 143 advice firms representing about 500 advisers and conducted in the first quarter of 2026, finds that pricing now increasingly follows the complexity of a client’s affairs and rewards the adviser’s professional judgement and expertise, not assets under advice.

Firms were asked how they price their services generally, and what they would charge to advise five hypothetical clients ranging from a young couple with a mortgage to a high-net-worth family with $12.5 million in assets.

The report says the proportion of firms charging a purely asset-based ongoing fee “has fallen from 18 per cent in 2023 to 10 per cent in 2026,” a decline of 8 percentage points, or 44 per cent.

The report says fixed fees are now “the most commonly used pricing model for ongoing advice services,” adopted by 49 per cent of firms. Hybrid structures, which combine a fixed fee with a percentage component, have grown fastest of all, more than doubling from 14 per cent of firms in 2023 to 38 per cent in 2026.

The report says the growth in hybrid structures “suggests many firms are seeking a middle ground between traditional asset-based pricing and purely fixed-fee arrangements”, which are a way to “balance the certainty of fixed-fee pricing with recognition that the value and responsibility associated with advising clients may increase alongside their wealth”.

Some firms also charge for the first meeting itself, separate from any advice fee. Prices for that initial get-to-know-you meeting, usually taken after a discovery call but before advice begins, range from $350 to $990, and most commonly fall between $440 and $660. The fee is not for advice but it pays the adviser for the time it takes to assess a client’s fit with the adviser and firm, and it secures the client’s commitment before a paid engagement begins.

Most firms, 61 per cent, still charge one all-in fee that covers the client’s first enquiry, preparing a plan and then implementing the advice. Another 31 per cent invoice clients for advice and implementation separately, and 6 per cent start billing an ongoing monthly fee the moment a client signs on, even before any advice is provided.

Complexity, not quantum

The quantum of investable assets plays a smaller role than complexity in setting the engagement fee. Only 38 per cent of firms say asset size drives the price directly; 39 per cent say assets matter only once they have genuinely complex advice requirements, such as multiple entities or trust structures; the remaining 23 per cent ignore asset size altogether.

“Complexity appears to be a more significant driver of initial advice fees than asset values alone,” the report says.

Firms are selective about who they want as clients. The report finds that three-quarters rate the hypothetical clients Ted and Valerie, pre-retirees with $2 million in home equity, as “one of our ideal client types”. Just 11 per cent say the same of Scott and Lucy, a young couple with a $950,000 mortgage. And a third of advisers say they would not take Scott and Lucy on at all.

Advisers’ responses to the report’s five client scenarios help to illustrate the differences. James and Susan, a high-net-worth couple with multiple family trusts and company structures, attracted an average ongoing fee of $30,469, median $22,000.

Rob and Tanya, business owners with $3.3 million in an SMSF and a business they plan to sell within a decade, attracted an average of $13,343, median $12,000.

Ted and Valerie attracted an average of $6,630, and Scott and Lucy, a young couple with $93,500 in combined super, attracted just $2,683, with most firms also expecting insurance commissions on top.

“Clients with business interests, multiple entities, sophisticated structures or broader strategic considerations generally attracted higher fees than those with simpler circumstances,” the report says.

“This aligns with the reality that many advice engagements require significant expertise, judgement and coordination beyond the preparation of recommendations alone.”

The report says the highest-performing advice firms “are rarely the firms with the highest fees”. Rather, they are firms that align their target market, service proposition, workflows and technology with pricing that reflects the value they deliver, treating price as only one part of a sustainable business. This is not at odds with pricing for complexity: it means charging appropriately for the work involved, not simply charging as much as the market will bear.

This shift away from asset-based pricing is tied to a broader change in what advisers are being asked to deliver. Clients now must actively sign off on their ongoing fee each year, so firms increasingly have to justify that fee by what they did for the client over the preceding 12 months, not by how markets performed.

The report says ongoing fees increasingly reflect “strategic advice, accountability, behavioural coaching and long-term guidance,” rather than simply preparing investment recommendations.

Judgement and expertise

Unlike an asset-based fee, which might go up or down when a client’s portfolio rises or falls, a fee built on judgement and expertise pays firms for work they can claim credit for, and leaves their income less at the mercy of markets that may fall through no fault of their own.

A fee that reflects complexity and ongoing guidance rewards coordination between any external parties, such as accountants and lawyers, the discipline to stop a retiree drawing down capital too fast or too slowly, and the judgement to stop a client selling out of the market at the wrong time.

Growth in the advice market is also reshaping the incentive to price by volume. Advisers onboarded a median of 12 new clients each over the past year; some firms brought on as few as two, others more than 100. Fifty-six per cent of firms said more than 90 per cent of new advice clients went on to sign an ongoing service agreement.

Growth in advice is now limited more by adviser capacity than by client demand, giving firms less reason to compete on price and more reason to price for the value of the relationship and the service they deliver.

The report says none of its figures should be read as a recommended fee. Benchmarking provides context for a pricing decision, not a substitute for understanding a firm’s own costs, service proposition and target market. The report says readers should treat its findings “as a reference point rather than a rulebook”.

“The most effective pricing models are not necessarily those that mirror the broader market,” it says. “Rather, they are those that align a firm’s target clients, value proposition, operating model and commercial objectives.”