RIAs Split on Fees as Hourly and Flat Models Rise

A gathering of financial advisors outside Chicago last month focused on flat, hourly and hybrid fee models as firms weigh alternatives to the standard 1% assets-under-management structure. The event was organized by the Transparent Advisor Movement and drew founders and principals from small registered investment adviser firms.

Organizers described the meeting as a forum for sharing fee structures and operational experience. Movement founder Sara Grillo said she wants a Flat Friday chapter in every major U.S. city by 2030 to increase awareness of flat, hourly and retainer models.

Industry data discussed at the meeting show most RIAs still use AUM fees. One snapshot counted about 96% of firms charging AUM fees. At the same time, about 45% reported using fixed fees and 29% reported hourly charges. Only 18% of firms relied solely on AUM fees, and the share using fixed fees has risen over the past 25 years. By 2025, roughly 4.5% of advisers did not offer any asset-based fee, while many firms pair AUM with other pricing options.

Attendees said client behavior affects pricing choices. Analyst Katie Balberchak, who works with a flat-fee service provider, said flat pricing makes the dollar cost clearer for clients because fixed amounts are more obvious than percentages. Other research cited at the event indicated affluent clients sometimes prefer AUM fees or commissions to retainers, and that many clients do not change advisers when firms alter pricing.

Advisors at the meetup outlined specific fee schedules in use. TapestryFP presented tiered flat fees that start at $4,800 for a foundations plan, move to about $8,400 for a core ongoing package and exceed $13,000 for a legacy tier. Timothy Financial Counsel described an hourly-only model with rates between $375 and $800 per hour, which can total roughly $3,750 to $18,000 annually depending on complexity. Focused Up Financial offers either a $10,000 minimum yearly fee or a 1% AUM option plus a 0.25% turnkey management fee. Retirement Portfolio Partners charges about $6,000 a year for comprehensive advice and portfolio management. Other firms reported one-time planning fees and lower ongoing retainers targeted at early-stage clients.

Speakers addressed business impacts beyond headline pricing. Andrew Swierenga of Timothy Financial Counsel said hourly and advice-only models have produced strong demand and wait lists at his firm, which has used those models to recruit and train junior advisors. Erik Barnes of Retirement Portfolio Partners outlined a three-year expectation for reaching profitability for solo advisers, saying practices should review plans if they are not building by year three.

Regulatory issues were part of the discussion. Panelists noted state regulators have examined some flat-fee practices and the Securities and Exchange Commission has issued risk alerts and pursued enforcement actions tied to fee disclosures and conflicts of interest. Advisors at the meeting encouraged peers to review filings, join peer networks and use formal training before changing fee models.

Speakers emphasized transparency in client communications. Charlie Horonzy, who added an AUM option after operating on flat fees, said advisers must show clients the actual dollar cost and explain the services provided. Horonzy stated, “There is no single ‘right’ fee model, but absolute transparency is non-negotiable.”

Background material presented at the event noted that while AUM remains the dominant revenue source, more firms now offer a menu of options-flat, hourly, subscription or hybrid-to align pricing with client preferences and firm economics. Attendees recommended testing fee changes through peer forums and training programs and urged careful review of regulatory and profitability implications before altering a firm’s fee structure.