Fee-Based Investment Management

Fee-based investment management is the process by which an advisor is compensated solely for providing advice and managing investments rather than for the products they sell. This model is particularly well-suited for advisors who wish to serve as fiduciaries, who are required by law to disclose any potential conflicts of interest and make recommendations that are in their clients’ best interests. Fee-based pricing removes the incentive for advisors to push products that pay them commissions and helps them earn clients’ trust. More info www.ex-ponent.com/

Fees & Costs

Management fees (also known as asset-based fees) are charged by investment managers to cover the costs of running their funds. They typically include compensation to the fund’s investment managers, as well as investor relations and administrative expenses. Fee structures vary widely, with some ranging from as little as 0.10% to over 2% of assets under management. Some managers justify high fees by arguing that they deliver superior risk-adjusted returns or access to exclusive opportunities. However, excessive fees can significantly erode long-term investment returns, so it’s important for investors to evaluate fees carefully.

A Comprehensive Guide to Exponent Investment Management’s Services

Some advisors use a flat percentage rate or AUM compensation model, charging clients a single monthly fee that declines as the value of their investments grows. While this may seem simple, it can also be an effective way to build long-term relationships with clients who appreciate a transparent, predictable revenue stream that isn’t linked to market performance or wallet share. Other strategies that allow advisors to earn a steady income while still offering a flexible and cost-effective service to their clients include tiered fee schedules, commission-based models, or hybrid fee structures that incorporate elements of both fee-based and fee-only pricing.