Advisors watching for dip in fees on biggest clients: Cerulli

Advisors watching for dip in fees on biggest clients: Cerulli
Financial advisors are becoming a bit more leery that fees, particularly for their wealthiest clients, are on the verge of taking a hit.
MAY 05, 2025

While the actively managed mutual fund industry has seen fees lower dramatically in the past two decades due to competition from much cheaper exchange-traded-funds tied to stock and bond indexes, the financial advice industry has not suffered the same fate.

Advisors’ fees for clients, typically in the neighborhood of 1% - 100 basis points – of assets under management, have held remarkably steady since the 2008 financial crisis. What’s changed is that, while advisors’ fees are remaining steady, clients are demanding more and better services - think accounting and legal - for the same price.

For an advisor who currently charges customers a 1% fee with $100 million in assets under management, that translates into $1 million in annual revenue for the registered investment advisory firm. RIAs have healthy profit margins, averaging annually in the range of 25% to 35%, or $250,000 to $350,000, in the example of a firm with $100 million in assets.

However, according to a new report by consulting firm Cerulli Associates, “while advisors’ average fees have remained largely stable, signs of change are on the horizon.”

Financial advisors are becoming a bit more leery that fees, particularly for their wealthiest clients, are on the verge of taking a hit, albeit a slight one. 

“By 2026, 83% of financial advisors expect to charge less than 1% for clients with more than $5 million in investable assets, and the average fee for clients with more than $10 million in assets is expected to be around 66 basis points, representing a slight decrease from current costs,” Cerulli noted in the report received by InvestmentNews. “That is nearly half the anticipated cost for clients with $100,000 in investable assets.”

"I haven’t noticed much pushback from clients when it comes to fees, but I have gotten away from charging just for financial planning, so I'm offering a more aggregated service to customers now," Eric Reinhold, an advisor whose eponymous firm is registered with Eversource Wealth Advisors, said to InvestmentNews. 

Expenses will be the biggest consideration for customers when choosing a financial advisor, according to the Cerulli report.

“For those advisors looking to attract [high net worth] clients, offering a wider range of services is essential while maintaining an attractive and competitive cost structure,” the report said.

With fee compression, plus an emerging new generation of clients, advisors are challenged to evolve to meet this changing demand.

“Today, expectations for service and pricing structure are vastly different from those of previous generations,” according to the report. “To succeed in the future, advisors must adjust their business models to cater to the next wave of clients.”

“The methods by which advisors plan to charge their clients are not the only aspect changing,” Cerulli noted. “Clients and potential clients increasingly expect their advisors to provide more services beyond investment management. They desire a more holistic approach, placing a greater emphasis on comprehensive financial planning.”

Latest News

Blackstone taps former Lazard leader Jennifer Abate to head RIA wealth unit
Blackstone taps former Lazard leader Jennifer Abate to head RIA wealth unit

The alts giant's latest executive hire builds on its continuing strategy to expand into the private wealth space.

The 'magic number' of $1.3M for retirement: on the money, or off the mark?
The 'magic number' of $1.3M for retirement: on the money, or off the mark?

While it's a useful rule of thumb, wealth industry experts agree Social Security benefits, retirement income planning, and individual expenses should also be factored in.

Wall Street's biggest bull stands pat on S&P 7,000 call
Wall Street's biggest bull stands pat on S&P 7,000 call

The holdout optimist from Wells Fargo sees market "past peak uncertainty" as trade war fears push many cheerleaders to pare back their predictions.

2025 InvestmentNews Awards: The race is on
2025 InvestmentNews Awards: The race is on

Last year's standout winners reflect on their triumph as the wealth industry gears up for another unforgettable night in New York City.

AdvicePay beefs up compensation tech capabilities with AdvisorBOB acquisition
AdvicePay beefs up compensation tech capabilities with AdvisorBOB acquisition

The deal aims to help advisors streamline their compensation processes while expanding AdvicePay’s reach across the full revenue cycle

SPONSORED The evolution of private credit

From direct lending to asset-based finance to commercial real estate debt.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.