How should an RIA explain fees before a first call?

An RIA should explain what the client would pay for, how the fee is calculated, what other costs may apply, and what happens before any paid engagement begins. Put that explanation where a prospect can find it before booking, and make it agree with the firm's current brochure, relationship summary where applicable, and advisory agreement. A website summary can make a decision easier; it does not replace required disclosures or the contract. If the final price depends on the work, explain the variables rather than offering a deceptively simple starting figure.

Key takeaways

• Describe the service and billing basis together. An annual percentage without the assets it applies to is not a complete price explanation.
• Separate the adviser's charge from investment, custody and other third-party costs. Do not label the whole relationship "all-inclusive" unless that is true.
• Review the web page, brochure and contract as one set. A clear headline cannot fix conflicting terms further down the path.

This article concerns US advisory-firm communications. It is an editorial framework, not legal advice, a recommended fee schedule or a description of any particular firm's prices. The firm's compliance reviewer should determine its disclosure duties and approve the exact copy.

What question is the prospect trying to answer?

The prospect needs to know whether the available service and its cost are plausible for their situation before sharing detailed financial records or spending time on a sales call. The page should help them decide what to ask, not decide for them that the service is good value.

For a related check, see our guide to describing the service in a testable value proposition.

The SEC's Investor.gov guidance asks people to consider services, fees, conflicts and the agreement when choosing an investment adviser. It notes that the services and fees ultimately depend on the agreement negotiated with the adviser. [1] A useful fee page follows that reader decision: what work is offered, how it is charged, and what the reader should inspect next.

Consider two readers with the same investment balance. One wants a one-time planning engagement. The other wants ongoing discretionary investment management and regular planning meetings. They cannot compare offers sensibly from an asset percentage alone. If a firm offers only the second service, say so. Do not imply that a project service is available simply to capture the first reader's inquiry.

A good explanation can also tell a reader that the firm is not a fit. That is not a website failure. It is clearer than using an ambiguous price to attract a call and revealing the real service boundary later.

What belongs above the booking button?

Put the service, billing basis and major conditions near the next step. A reader should not need to search a footer PDF to discover an account minimum or a separate planning charge that changes the apparent offer.

For a related check, see our guide to making fees and process findable on an About page.

Use the firm's real service names, then explain them in ordinary words. "Ongoing planning and investment management" should lead to a description of the work and its frequency. "Financial planning" should not silently include tax-return preparation or legal drafting if the firm does not provide them. If coordination with outside professionals is included, explain what coordination means and whether their charges are separate.

For the billing basis, state the facts that actually determine the fee. These may include assets covered by an agreement, a fixed project scope, hours worked, a recurring subscription, or a combination. Investor.gov describes hourly, fixed or flat, and asset-based client fees, alongside other ways financial professionals may be paid. [2] This is not a menu that every RIA offers or a recommendation to introduce a new model.

Explain significant minimums, whether a quote is needed, and when payment starts. A first conversation may be an assessment of fit rather than a planning session. Do not describe it as free advice if no advice is offered. If the call itself has a charge, make that clear before the reader books it.

How can you explain an asset-based fee accurately?

Identify the assets used in the calculation, the rate structure, the billing period and the method used to value the assets. A prospect should be able to distinguish a simple annual rate from a tiered schedule and know where the full terms live.

Avoid an isolated "one percent" statement that leaves unanswered whether the percentage is annual, which accounts count, whether it applies to assets held elsewhere, or whether a minimum fee changes the result. Do not imply that a lower balance means a lower effective percentage if a minimum or other charge could apply.

If the page uses a dollar illustration, label it hypothetical and spell out the assumptions. For example, a fictional annual rate applied to a fictional balance can illustrate multiplication, but it cannot establish the actual invoice without the valuation, tiers, timing and agreement. Avoid turning a simplified annual figure into a promised quarterly bill.

The SEC's Form ADV brochure bulletin explains that the brochure describes how the adviser is paid, its fee schedule, negotiability, billing or deduction method and assessment frequency. It also discusses other fees and expenses clients may pay. [3] Use those current firm facts as the inputs for web copy; do not work backward from a more attractive marketing number.

A rate comparison alone does not settle value. The included services, investment approach, advice boundaries and conflicts still matter. Neither a high fee nor a low fee proves the quality of the advice.

What should a fixed or hourly explanation include?

A fixed price needs a defined deliverable and boundary; an hourly arrangement needs an explanation of how work is authorized and billed. Otherwise, the apparent certainty of the price can conceal uncertainty about the engagement.

For a project, identify the questions or work covered, the expected outputs, the process for revisions, and what would require a separate engagement. Do not promise a tax outcome or investment result as the deliverable. If the firm determines scope only after an initial review, describe that sequence and make clear when the client accepts a quote.

For hourly work, explain the rate or the source of a quote, whether there is a minimum, and how the client learns that the work will exceed an estimate. Those are suggested reader questions, not universal contract requirements. Publish only the procedures the firm actually follows.

For recurring planning, say what happens during the recurring period and what ends when the relationship ends. A monthly payment label does not by itself explain whether the engagement is month-to-month, whether a longer commitment exists, or whether investment management is included.

These details help a reader compare scope, not merely price. They also prevent a firm from attracting a question it cannot answer under its service model.

What should an annual engagement's lifecycle explanation add?

For an annual planning engagement, compare the current page, agreement and full fee disclosures for four details: when the service year starts, how the billing schedule relates to the engagement term, what happens to prepaid fees on termination, and the actual renewal process. These are suggested clarity checks, not universal website or contract requirements. Keep this lifecycle explanation consistent with the service and extra-cost descriptions above.

“Annual” can describe a price or service period without explaining when an engagement starts or how long the client commits. State the firm's actual arrangement. If payments are made during the year, distinguish their timing from the engagement term. For renewal, explain only the process the agreement supports, including whether a new decision or notice is involved and where the reader can inspect the terms. Do not invent automatic renewal, a notice period or a cancellation deadline.

Required brochure disclosures are a separate matter. Form ADV Part 2A Item 5B addresses billing or fee deduction and its frequency. Item 5D addresses advance payment and, when fees may or must be paid in advance, disclosure of how a client may obtain a refund if the contract ends before the billing period ends and how the amount is determined. These are brochure instructions with applicability limits, not a universal annual-retainer webpage rule or a prescribed refund formula. The firm's qualified reviewer should check the applicable requirements and actual terms before the summary is approved.

Keep an unresolved difference visible. A webpage promising a refund or a renewal choice that the current agreement does not explain needs review, not a convenient assumption. Link the reader to the firm's full fee disclosures and agreement route through its appropriate process; a short annual-fee summary does not replace them.

How do you separate advisory fees from other costs?

Show the adviser's charge and identify the categories of outside costs that may still apply. Do not present a single number as the total if meaningful costs sit outside it.

Investor.gov's account-opening bulletin distinguishes fees paid to the adviser from fees paid to third parties, and notes that owning investments can create ongoing product costs. [2] The brochure bulletin names brokerage, custody and fund expenses among the costs that may need explanation. [3] Exact costs depend on the accounts, products, providers and agreement.

A plain-language cost map can use four rows: adviser compensation, investment-product expenses, account or transaction costs, and other professional work. Mark each as included, separate, not applicable, or unknown pending review. "Unknown" is better than inventing a figure for a service the prospect has not chosen.

Do not suggest that a fee-only label eliminates every cost or conflict. The reader still needs to understand what the firm receives and what other providers receive. Investor.gov warns that how an adviser makes money can create conflicts even though advisers must not put their interests ahead of the client's. [1]

A fee-page reconciliation worksheet

Use this worksheet internally before publication. It is an editorial tool, not a compliance certification. For each row, compare the website statement with the current disclosure and agreement; record the reviewer and correction needed.

A row with conflicting evidence is a reason to pause that statement, not to choose the more appealing version. The SEC marketing guide's general prohibitions include misleading material facts, unsupported material statements and misleading implications. [4]

What does a useful explanation look like?

A fictional firm might write: "We provide ongoing planning and investment management. Our advisory fee is based on the assets covered by your agreement, subject to our published schedule and minimum. Investment-product expenses and some account costs are separate. The initial conversation assesses fit; paid work starts only under an agreed engagement. Read our current brochure and ask us to explain the total costs for your situation."

This is a structural example, not approved copy for any real firm. It deliberately contains no invented price, promise of returns or claim that the firm offers one-time work. A real firm should replace the general schedule reference with its accurate explanation and show the material conditions clearly.

A poor version would say "one simple fee for everything" while a separate planning charge and fund expenses remain. Adding a general disclaimer at the bottom would not make that headline a reliable summary. The fix is to state the scope and cost truthfully.

How should you test the page before publishing?

Ask a reviewer to use the page as a prospect would: read it on a phone, follow the disclosure links and attempt to describe the proposed service and billing basis without a call. Then compare that description with the agreement.

Check the form and booking path too. A page that describes a fit conversation should not lead to a form that implies immediate onboarding. Do not request account statements, identification documents or tax returns through an ordinary marketing form merely to discuss possible scope. Use the firm's approved secure process when sensitive documents are actually needed.

After publication, record recurring questions about unclear costs and revise the explanation when the firm's terms change. Do not infer that fewer inquiries means a worse page; some people may correctly recognize that the service is not for them. Page views, questions, meetings and clients remain separate observations.

The bottom line

Explain the work, the calculation and the boundaries before asking for a call. Align the website with the firm's current disclosures and agreement, separate outside costs, and let a reader see what remains uncertain. The next useful step is to complete the reconciliation worksheet for one real service, not invent a universal fee benchmark.

Sources

[1] SEC Investor.gov, Investment Advisers: https://www.investor.gov/introduction-investing/getting-started/working-investment-professional/investment-advisers

[2] SEC Investor.gov, Investor Bulletin: Opening an Investment Advisory Account (published September 25, 2017): https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins-44

[3] SEC Investor.gov, Investor Bulletin: Form ADV - Investment Adviser Brochure and Brochure Supplement: https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins-71

[4] SEC, Investment Adviser Marketing, Small Entity Compliance Guide (April 28, 2021): https://www.sec.gov/resources-small-businesses/small-business-compliance-guides/investment-adviser-marketing