How are advisory fees structured in wealth management, and roughly what does a HNW client pay?

How to answer

The dominant model is an annual advisory or wrap fee charged as a percentage of AUM, billed quarterly on a tiered, breakpoint schedule. The legacy benchmark is around 1%, but the average AUM-based fee today is closer to 0.70%, and it compresses further as assets rise — roughly 0.67% in the $10–25M band and around 0.58% above $25M — both from scale economics and competitive pressure. So a $5M HNW relationship at about 0.75% generates roughly $37,500 a year in recurring revenue, while a $25M client at ~0.58% generates about $145,000 on five times the assets at a lower rate.

Key idea: ~1% legacy, ~0.70% average, compressing below 0.60% at $25M+.