How Much Do Money Managers Charge? Fees, Costs and What They Should Cover

By Kevin Luu, Co-Founder and Chief Learning Officer. Reviewed on 2026-09-30.

There is no standard price. Many registered money managers charge an annual percentage of the assets they manage, often on a tiered schedule where the rate falls as your balance grows; others charge a flat annual retainer, an hourly rate, or, for wealthier investors only, a share of gains. The SEC’s own investor bulletin illustrates ongoing fees of 0.25%, 0.50% and 1% a year, and a registered adviser must disclose its fee schedule in its Form ADV Part 2A brochure.

For a two-income family earning $750,000 or more, with RSUs vesting every quarter and kids under 12, the percentage on the fee schedule is only half the question. The other half is what that fee buys: stock picking, or coordination of equity compensation, taxes and the kids’ accounts. This guide covers both.

The four ways money managers are paid

The old version of this page said performance fees run “0.15% to 0.75% of AUM.” That is wrong on two counts: a performance fee is measured on gains, not on assets, and federal rules restrict who can be charged one. The Investment Advisers Act generally bars a registered adviser from charging performance fees, and SEC Rule 205-3 exempts contracts with investors who meet its “qualified” test. Since the SEC’s inflation order took effect on June 29, 2026, that means at least $1,400,000 managed by that adviser right after signing, or a net worth above $2,700,000 (counting assets held jointly with a spouse), per SEC Release IA-6961. The earlier thresholds were $1,100,000 and $2,200,000.

What else you pay besides the manager’s fee

The adviser’s fee is rarely the whole bill. Form ADV Part 2A, Item 5.C requires the adviser to describe other fees you may pay, such as custodian fees and mutual fund expenses, and to disclose that you will incur brokerage and transaction costs (SEC Form ADV Part 2 instructions). In practice, check four layers:

• Fund expense ratios. Each mutual fund or ETF in the portfolio charges its own annual expense, listed in the prospectus fee table. A manager who builds with low-cost index funds and one who uses in-house funds can have the same headline fee and very different all-in costs.
• Trading and custody costs. Commissions, spreads and account fees at the custodian.
• Wrap programs. One fee that bundles advice and trading. Compare it with the unbundled total, not with the advice fee alone.
• Commissions on products. Item 5.E requires an adviser whose people earn commissions on securities sales to say so and to explain the conflict of interest.

The fastest way to see all of it is to look the adviser up on the SEC’s Investment Adviser Public Disclosure site and read Item 5 of the brochure. Item 5.A also requires the adviser to state whether its fees are negotiable.

Why a small percentage becomes a large number

The SEC’s bulletin How Fees and Expenses Affect Your Investment Portfolio takes $100,000 growing 4% a year for 20 years. With a 0.25% annual fee it ends near $208,000; at 0.50%, near $198,000; at 1.00%, near $179,000. Scale that to the $1 million a dual-income tech or biotech household can accumulate from RSU sales within a few years, and the gap between a 0.25% and a 1% fee is roughly $290,000 over 20 years, before any difference in the service itself (derived by multiplying the SEC figures by 10).

That is not an argument for always choosing the cheapest option. It is an argument for knowing, in dollars, what you pay each year and what you get for it.

Worked example: a $900,000 Bay Area household with RSUs

Assumptions (hypothetical, for illustration): married couple in California, household income $900,000 (two W-2 salaries plus RSU vests), children aged 4 and 7. Investable assets of $3.7 million: $2.5 million in a taxable brokerage account built mostly from sold RSUs, and $1.2 million across two 401(k)s. The fee schedules below are invented examples, not quotes from any firm.

Option A: a tiered AUM schedule on everything

• 1.00% on the first $1,000,000 = $10,000
• 0.80% on the next $2,000,000 = $16,000
• 0.60% on the remaining $700,000 = $4,200
• Total: $30,200 a year, a blended rate of about 0.82%

Next year, if another $400,000 of RSUs vests and is added, the fee rises by $2,400 at the 0.60% tier with no change in the work.

Option B: a flat retainer

A hypothetical $18,000 a year retainer covering the same accounts plus RSU sale planning and coordination with the family’s CPA. The fee stays the same when the balance grows, and is renegotiated only if the family’s situation changes.

Does the tax deduction change the math?

Barely. For federal purposes, investment advisory fees are a miscellaneous itemized deduction, and the One Big Beautiful Bill Act made their elimination permanent for tax years beginning after December 31, 2025 (P.L. 119-21, section 70110). So for 2026 there is no federal deduction.

California did not conform. The FTB’s 2025 Schedule CA instructions say California still allows miscellaneous itemized deductions subject to the 2% floor, including expenses paid to produce taxable income or manage investment property (Schedule CA (540) instructions, lines 19 to 22). In our example, the share of Option A’s fee tied to the taxable account is about $20,400 ($30,200 times $2.5M/$3.7M). If the couple’s adjusted gross income is $900,000 (401(k) deferrals would lower it slightly), the 2% floor is $18,000, so only about $2,400 counts. If their California taxable income falls in the 10.3% bracket ($742,958 to $891,542 for joint filers on the 2025 schedule), that is worth roughly $250, and California’s separate limit on itemized deductions for joint filers with federal AGI above $504,411 (2025) can shrink it further. In Washington, which has no wage income tax in 2026, there is nothing to deduct against. That changes for high earners: Washington has enacted a 9.9% income tax on income over $1,000,000 starting January 1, 2028 (Washington DOR), and how it will treat investment expenses is not yet known.

The conclusion: choose the structure on service and total cost, not on the deduction.

What the fee should cover for a family with equity compensation

For this household, most of the value a manager adds is not fund selection. It is decisions like these:

1. A written plan for selling vested RSUs so a single employer’s stock does not dominate the net worth.
2. Coordinating sales with the tax picture: RSUs are taxed as wages at vest, and federal withholding on supplemental wages is often 22% (37% on supplemental wages over $1 million in a year), which usually leaves a balance due at the 35% or 37% brackets for 2026 (IRS Publication 15).
3. Placing assets across taxable, 401(k) and any backdoor Roth accounts, and harvesting losses in the taxable account where it fits.
4. Funding the children’s accounts (529s, custodial accounts) in a way that matches what the parents want to teach.

If a manager’s proposal is mostly about portfolio returns and silent on these, you may be paying a percentage for the part that matters least. Our equity compensation and tax management pages describe what that coordination involves, and how much a wealth manager costs covers broader planning fees.

Five questions to ask before you sign

1. What will I pay in total dollars this year, including fund expenses and trading costs?
2. Is the fee negotiable, and does it drop at higher tiers or when accounts are grouped as a household?
3. Do you or your firm earn commissions or revenue sharing on anything you recommend?
4. Are you a fiduciary on every account you manage for us? (See what percentage of financial advisors are fiduciaries.)
5. What exactly will you do about our RSUs, our taxes and our kids’ accounts, and who does it?

Write down why you chose, not only what you pay

Your children will one day hire, keep or fire an adviser of their own. What helps them is not the name of yours but the reasoning: which fee model you chose, what you expected in return, and how you checked whether you got it. A one-page note in your FamilyKnowledge® Library, updated when you review the relationship each year, does that. As Kevin Luu puts it: “Your kids don’t need to inherit your portfolio. They need to inherit your decision-making process.”

Common questions

Is a portfolio management fee the same as a fund’s expense ratio?

No. The portfolio management fee is what you pay the adviser to run your accounts. The expense ratio is charged inside each fund by the fund company and is taken out of the fund’s returns, so you never see a bill for it. Your real annual cost is both added together, plus trading and custody costs. Ask the adviser for a single dollar figure that includes all of them.

What is a daily money manager?

A daily money manager handles household paperwork: paying bills, organizing records, tracking insurance claims. The work is often arranged for an aging parent. It is not investment management, and daily money managers are not registered investment advisers because of that role. If you are arranging help for a parent, confirm in writing that the person does not give investment advice.

Can I pay less by moving everything to one manager?

Often, if the schedule is tiered, because more of your assets fall into the lower-rate bands. But concentrating accounts also concentrates the relationship. Compare the total dollar fee both ways, and check whether the adviser groups spouses’ and children’s accounts into one household for billing.

Your next step

Pull your current adviser’s Form ADV Part 2A from the SEC site, find Item 5, and write down this year’s total fee in dollars next to what you receive for it. If you would like a second look at how your fees, RSUs and taxes fit together, the Tax & Wealth Assessment is a place to start. You can also read our guide to investment and risk management.

This is general education, and the right move depends on your family’s full picture.

Written by

Kevin Luu

Co-Founder and Chief Learning Officer, Bright Advisers

Kevin has advised high-income W-2 tech and biotech families since 2015, and leads the education-first Age Five Family Office from Brea, California.

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