Why I Cap My Fees at $20,000
Let’s address the obvious.
$20,000 per year is not a small number.
It’s roughly $1,600 per month.
That’s real money.
And I’ve asked myself the same question you might be asking:
If I’m charging $20,000 per year, am I truly providing $1,600 per month in value?
That question is exactly why the fee cap exists.
The Problem With Percentage-Based Pricing at Scale
Most advisory firms charge a percentage of assets under management.
1 percent is common.
At $2 million, that’s $20,000.
At $5 million, that’s $50,000.
At $8 million, that’s $80,000.
The work does not increase proportionally with assets.
But the fee does.
I’ve seen households with $7–8 million portfolios paying $50,000 to $60,000 per year.
If they are receiving planning, tax coordination, income architecture, estate integration, and active oversight that justifies that fee, great.
But in many cases, they’re not.
What they’re often receiving is:
A pre-built asset allocation model
Annual rebalancing
Basic tax-loss harvesting
Municipal bond substitutions
Minimal distribution planning
I’ve reviewed those portfolios.
They’re often the same cookie-cutter structures I saw inside large firms.
High internal costs.
Standardized allocations.
No deep income strategy.
No integrated tax modeling.
And still a full 1 percent fee.
My Philosophy Is Different
For households between roughly $2 million and $10 million, the real value is not stock picking.
It’s structure.
It’s:
Designing retirement income systems
Staging withdrawals intentionally
Coordinating Roth conversion windows
Managing survivor bracket compression
Stress testing sequence risk
Aligning estate intentions
That work is not linear with portfolio size.
An $8 million household does not require four times the planning of a $2 million household.
The conversations are deeper.
The architecture is more complex.
But the marginal workload does not justify perpetual scaling fees.
So I cap it.
Why $20,000
At $2 million, 1 percent equals $20,000.
That’s where most traditional advisory pricing starts to become meaningful.
Above that level, continuing to scale fees without increasing value proportionally did not sit right with me.
Capping fees does two things:
It aligns cost with value.
It removes the incentive to grow revenue simply by increasing assets.
I don’t want to make more money just because markets went up.
I want to make money because the structure I build is valuable.
The Distribution Reality
For many affluent retirees in Grosse Pointe, portfolios are generating significant monthly distributions.
At $5 million and above, retirement income may be $250,000 to $400,000 per year.
If I can:
Reduce lifetime taxes materially
Improve income durability
Prevent a sequence-driven mistake
Optimize survivor outcomes
Avoid over-conservatism
Identify blind spots in estate structure
The economic impact often exceeds the advisory fee.
Not through market outperformance.
Through structural improvement.
I’m Not a Market Savant
I don’t pretend to beat markets consistently.
I don’t chase hot strategies.
I don’t add complexity for the sake of appearing sophisticated.
What I do is live inside this work.
Every day.
Asset allocation is important.
But it’s only one piece.
Real financial planning integrates:
Investments
Taxes
Income sequencing
Estate structure
Risk exposure
Most portfolios I’ve reviewed that carry $50,000+ annual fees are still operating primarily as asset allocation services.
That’s not wrong.
It’s just incomplete.
Fewer Clients, Deeper Work
At a large firm, to earn the same income, I would need to manage nearly three times as many households.
That model rewards scale.
I prefer depth.
By capping fees and limiting capacity, I can:
Spend more time per family
Go deeper into modeling
Coordinate more deliberately with CPAs and attorneys
Avoid becoming an asset gatherer
I don’t want hundreds of relationships.
I want the right ones.
The Real Reason
The fee cap isn’t a discount.
It’s a signal.
It signals that:
The value is in architecture, not asset size.
My incentive is aligned with structure, not market movement.
You’re not penalized for building wealth.
For the families I serve, typically between $2 million and $10 million in investable assets, that alignment matters.
Because the goal isn’t to maximize fees.
It’s to maximize durability.
