The 6 Hidden Advantages of the Flat-Fee Affiliation Model

  • August 5, 2024

As you explore options for a move, cost and pricing undoubtedly weigh heavily on your decision-making process. We recognize the pivotal role that fees play in your evaluation. That’s why we’re excited to introduce you to our unique model: flat-fee pricing. Dive into how our transparent and cost-effective fee structure can redefine your experience as a financial advisor, offering stability, predictability, and unwavering support on your journey toward success. 

Your practice deserves a model as unique as your expertise and dedication. At Independent Advisor Alliance (IAA), we understand that the traditional AUM (Assets Under Management) fee structure may not align with every advisor’s vision for success. That’s why we proudly offer a distinctive alternative – the Flat-Fee Affiliation Model. 

The Flat-Fee Advantage

1. Financial Transparency

Your compensation should not be a mystery. In a world where transparency is paramount, the Flat-Fee Model stands tall. No more calculating percentages or worrying about fluctuations in AUM. With a straightforward annual fee, you have complete clarity on your expenses. Imagine the peace of mind that comes with predicting your overheads accurately. 

With flat-fee pricing, you have clarity on your annual costs. You pay $32,000 regardless of the size of your book. This stability empowers you to plan effectively and allocate resources with confidence. 

2. Consistency Amid Market Volatility

Market volatility is a constant in our industry. The Flat-Fee Model shields you from the impact of market volatility on your earnings. Regardless of fluctuations in AUM, your fee remains constant. This stability provides you with a more predictable cost structure, allowing you to focus on what truly matters – your clients. 

3. Cost Savings Over Time

Consider this scenario: With a grid fee structure, if your AUM grows from $80 million to $102 million, your fees could skyrocket proportionally. In contrast, with IAA’s flat-fee pricing, you keep substantially more revenue as your assets expand. This translates to significant cost savings as your practice flourishes. 

Let’s look at an example. A solo practitioner with IAA and pay $32,000 annually for the flat fee, then a portfolio management fee. In this example, the PATH model is 15 bps. You start with $80 million assets under management and grow 5% year-over-year, resulting in more than $102 million in year 5.  

In this example, your existing RIA’s fee is 44 bps. The chart illustrates that your assets grow, your expenses grow in parallel. At Independent Advisor Alliance, your net revenue grows at a faster rate than your assets grow. 

At IAA, we value our partnership and celebrate your success.

4. Growth Without Compromise

Scaling your practice doesn’t have to mean sacrificing your hard-earned income. As your assets and client base grow, your flat fee remains unchanged. This empowers you to reinvest in your practice, hire additional staff, or explore innovative technologies – all without the fear of increased costs eroding your profits. 

Unlike the grid fee structure where your expenses rise in tandem with your earnings, our model aligns your success with our own. We succeed when you succeed, without imposing additional fees as your AUM grows. 

5. Partnership

Just as you are there for your clients, IAA is there for you. We are strategically focused on building a community of successful financial advisors. We strive to assist you in helping you execute your vision as a business owner. We exist to make you successful. Your success should be your success.  

We prioritize transparency and partnership in every aspect of our relationship. Our flat-fee model underscores our commitment to your success by eliminating hidden costs and fostering open communication. We want to keep the money in our advisors’ pockets, enabling you to reinvest in your business and better serve your clients. 

6. Advisor Satisfaction

Don’t take our word for it – hear from your peers. In a recent survey, our existing advisors rated our pricing structure at 8.8 out of 10. This resounding affirmation reflects our dedication to providing value and fostering a mutually beneficial partnership. 

Elevate Your Practice Today

As you evaluate your options, remember that our flat-fee pricing model offers stability, transparency, and long-term savings. By partnering with IAA, you’re not just affiliating with a firm—you’re becoming part of a community committed to your growth and success. 

Adaptability is key for a financial advisor, the Flat-Fee Model offers you the flexibility and stability to thrive. It’s time to break free from the conventional and embrace a model designed to align with your growth ambitions.