Explore commonly used personal finance terms.
An asset-based fee is a fee charged by financial advisors or asset managers as a percentage of the assets under management (AUM). This fee structure aligns the advisor’s incentives with the client’s portfolio performance, as the fee increases with asset growth. Asset-based fees are common in wealth management and mutual funds, offering an alternative to hourly or commission-based fees. This structure is often considered transparent, as clients can see the direct cost of management services and gauge the overall value provided by their advisor.
