Compare
Performance Fees vs AUM Fees
We offer two distinct fee models because we believe clients deserve a choice in how they compensate their advisor. Here is how they compare.
Pay for Results
Our performance-based model charges zero management fee. We only earn when your portfolio reaches new highs. This creates true alignment between your success and our compensation.
- Zero management fee
- High-water mark protection
- True alignment of interests
- $0 cost in down markets
Comprehensive Planning
Our traditional AUM model provides comprehensive wealth management with a transparent annual fee. This covers investment management, financial planning, tax strategies, and ongoing portfolio reviews.
- Predictable annual cost
- Full-service financial planning
- No performance threshold required
- Available to all clients
Side by Side
Feature Comparison
| Feature | Performance Partnership | Wealth Management (AUM) |
|---|---|---|
| Fee Alignment | Advisor earns only when your portfolio grows | Advisor earns regardless of performance |
| Management Fee | 0% annual | 1.25% annual on assets |
| Performance Fee | 20% on gains exceeding hurdle rate | None — fee is charged regardless of returns |
| Hurdle Rate | Client selects 10% fixed or S&P 500 Total Return Index | Not applicable |
| Down Market Cost | $0 — no fee when there are no gains | Full fee charged even in losing years |
| High-Water Mark | Yes — losses must be recovered before new fees apply | Not applicable |
| Best For | Qualified clients seeking absolute returns and true fee alignment | Clients seeking comprehensive planning with predictable costs |
| Eligibility | Qualified clients ($2.2 million net worth or $1.1 million AUM) | Available to all clients |
See exactly how fees impact your portfolio over time.
Try the Fee CalculatorCommon Questions
Frequently Asked Questions
What is a high-water mark?
A high-water mark ensures we only charge performance fees on new profits. If your portfolio declines, we must recover the loss and reach a new peak before any performance fee applies. This protects you from paying fees on recovered ground.
What is the hurdle rate and why does it matter?
The hurdle rate is a minimum return threshold your portfolio must exceed before any performance fee applies. You choose between a 10% fixed annual rate or the S&P 500 Total Return Index. This means we only earn when we deliver returns above a meaningful benchmark, not just any positive return.
When does a performance fee model make more sense?
Performance fees work best for qualified investors who want maximum alignment between their advisor's compensation and their own results. If markets are flat or down, you pay nothing. The trade-off is that in strong years, the total fee may exceed a traditional AUM fee.
When does an AUM fee model make more sense?
AUM fees work well for clients who value comprehensive financial planning alongside investment management. The fee is predictable and covers a full suite of services including retirement planning, tax optimization, and ongoing strategy reviews.
Can I switch between models?
We discuss which model fits your situation during the discovery process. Your fee model is established in your advisory agreement and can be revisited as your circumstances change. Contact us to discuss your options.
Which model is right for you?
Schedule a consultation to discuss your goals and determine which fee structure aligns with your situation.