Understanding AUM vs AUA: Which Model Fits Your Wealth Management Strategy?

AUM vs AUA... do you know the difference?

Most wealth advisors charge based on AUM. But once you're managing $2 billion for a single client, basis points don't make sense anymore.

Here's the breakdown:
AUM (Assets Under Management) means you bill on the liquid assets you actively manage. A client with $100M at 100 basis points pays 1%.
AUA (Assets Under Advisory) means you bill on total net worth, not just what you manage. That model is built for the ultra-wealthy, where even a tenth of a percent on $2 billion becomes an absurd number.
At that level, a flat fee is the only structure that makes sense for both sides.

Understanding which model fits your client isn't just billing strategy. It's how you signal you're built for that tier.
Which model does your firm use?
#wealthmanagement #RIA #financialadvisors #AUM