Aceeda

Asset-Based Fees

For Investment Advisory Services.

An asset-based investment fee ties a portfolio manager’s compensation to the total value of assets under management. This type of fee is typically calculated as a fixed percentage of the client’s account balance and is charged periodically (e.g., quarterly, or annually). The fee structure ensures that the adviser’s interests are aligned with the growth of the client’s portfolio, as higher account values result in higher fees for the adviser. Unlike performance-based fees, asset-based fees are charged regardless of whether the account earns a return, making it a straightforward and predictable method for compensating the adviser.

Under the Investment Advisers Act of 1940, asset-based fees may be charged to all clients, regardless of net worth or account size, as long as the arrangement is disclosed in the advisory agreement and meets fiduciary standards.