Household aggregation for advisory fee breakpoints

Householding begins with eligibility, not a shared surname. Confirm which accounts the signed terms permit you to group, when changes take effect and whether excluded assets qualify for pricing thresholds.

Worked example: aggregate first

Eligible accounts contain $600,000 and $900,000. Assume annual marginal rates of 1.00% on the first $1 million and 0.75% above it, equal quarterly installments and proportional allocation permitted by the terms.

The $1.5 million household has a $13,750 annual fee and a $3,437.50 quarterly fee. The smaller account's 40% allocation is $1,375; the larger account's 60% allocation is $2,062.50. Separate billing at 1.00% would total $3,750 quarterly, a $312.50 difference.

Keep three questions separate

1. Which assets establish pricing eligibility?
2. How is the fee allocated among accounts?
3. Which account is authorized to pay which charge?

A household discount does not itself authorize one account to pay another's fees. Ask the CCO and counsel about account specific restrictions rather than assuming a universal rule.

Review membership, supporting terms, effective dates, duplicate membership and missing accounts. Confirm allocations sum to the total after documented rounding.

The 2021 SEC staff alert described failures to aggregate eligible client or family accounts and apply declining schedules as applicable. SEC Division of Examinations fee calculation observations (2021)

FAQ

Related guides

• How to calculate tiered and blended AUM fees
• custodian billing system tie out.

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