Wealth Advisory Practice Economics: AUM Fees, Client Profitability & Practice Value
Run the numbers of a fictional advisory firm: tiered AUM fee schedules, revenue from market growth and net flows, client segments and minimum fees, advisor capacity, profit per client, fee compression, the practice P&L and what the firm is worth – every cell checked as you go.
The first lesson is free — no account needed.
About this course
A wealth advisory practice economics course that runs the numbers of one fictional advisory firm, Brookmere Wealth Partners, in a spreadsheet, for financial advisers, practice managers and wealth management analysts. You price every client on a tiered AUM fee schedule and find the blended fee, project five years of AUM from market returns and net flows and split revenue growth into markets and flows, sort clients into segments and apply a minimum fee, turn the service model into advisor hours and capacity, allocate the cost to serve and find the clients served at a loss, test what a cut of 5, 10 or 20 basis points does to profit, build the practice P&L and margin, and value the firm with revenue and profit multiples and a simple DCF. Fictional firm, illustrative figures, with no affiliation with any regulator, custodian or broker-dealer. Not investment advice. The first lab is free.
Lessons
- Tiered AUM Fee Schedules & the Blended FeeFree
- Revenue from AUM Growth: Market Return + Net Flows Pro
- Client Segmentation & Minimum Fees Pro
- Advisor Capacity: Clients per Advisor & Hours per Client Pro
- Client Profitability: Revenue vs Cost to Serve Pro
- Fee Compression Scenarios: What a Few Basis Points Cost Pro
- Practice P&L, Operating Margin & Compensation Ratio Pro
- Practice Valuation: Revenue Multiple vs DCF-lite Pro