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Impact Investing and Financial Planning Blog

Denver, Colorado

Why Are You Still Paying a 1% AUM Fee? Thumbnail

Why Are You Still Paying a 1% AUM Fee?

A fallacy that has been spread by the financial services industry for many decades is the idea that collecting a 1% AUM (Assets Under Management) fee provides incentive to achieve high performance (aka “If I win, you win” or “If I lose, you lose”). This concept allows advisors to charge a fee that, once over a certain AUM threshold, can be rather egregious and continue to provide enormous profit margins.

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