Ditch AUM Minimums: The Business Case for Advice-Only

Ask a traditional advisor who they can serve, and the honest answer is a sliver of the country. Charge on assets under management and the math forces a minimum account size, which quietly narrows your addressable market to the 2 or 3 percent of people who clear the bar. Steven Fox spent his career arguing that the other 97 percent aren't unserviceable — they're just being ignored.

On this episode of Advisor Ally, Fox tells Vineet Mohan how that conviction led him from an unlikely start to founding a flat-fee planning firm, selling it to his employees, and building something new: a corporate RIA designed so advisors can run an advice-only practice without also running a business they never wanted to run.

From the Marine Corps to financial planning

Fox spent eight or nine years in the Marine Corps before he ever thought about finance. When he got out, he wanted to be the first in his family to finish college, and he wanted to stay in San Diego, where he'd met the woman who is now his wife. He picked finance at San Diego State for a simple reason — he'd always enjoyed reading about it — and assumed he'd end up in corporate finance or as a fund analyst.

A guest speaker changed that. Someone came to talk to a student finance group about life as a personal financial planner, helping real people instead of improving a corporation's balance sheet, and it immediately sounded more satisfying to Fox. San Diego State happened to have a planning program that let him sit for the CFP exam straight out of undergrad, so he did. A part-time paraplanner stint at MetLife taught him quickly that the big-institution path wasn't for him, and he launched his own firm as soon as he graduated: NextGen Financial Planning.

Building NextGen for the people nobody wanted

The whole point of NextGen was to serve people the industry had written off. Young professionals, Fox included at the time, don't have millions to invest and have completely different planning needs than retirees or high-net-worth clients — and the prevailing wisdom said you couldn't profitably serve them. Fox thought that was nonsense.

The clients proved him right about the need, if not the ease. The median client age over the life of the firm was around 35, usually with little to no investable assets.

"It was literally true that we had more debt under management than we had assets at various points — student loans, credit cards, car loans. I thought that was a lot of fun."

To serve those clients he threw out AUM pricing entirely. NextGen charged a flat annual fee covering both planning and investment management regardless of account size. Within a few years he'd built a simple complexity calculator, posted right on the website, that prospects could use before they ever talked to him. It asked plain questions — single or married, own a home, equity compensation, rental properties — and spat out a number that tracked how much time the firm expected to spend on that person over a year. Zero AUM or a sizable inheritance, the charge was the same, because it was priced on effort, not assets. To Fox that was simply more fair.

He's clear-eyed about why an approachable entry point matters. Financial planning is intangible — hard for people to understand what they're even buying — and most of his clients had never worked with a planner before. Short-term projects and one-hour meetings let people test the water and see what working with the firm actually felt like before committing to the full ongoing relationship. The clients who came usually arrived on the back of a trigger event: new equity comp, an inheritance, a marriage, a baby, a house. Something got complex enough or scary enough that reading subreddits no longer cut it.

The accidental, unhappy business owner

After selling NextGen to his employees, Fox turned to the problem that his own experience had made vivid. It's easier than ever to start an RIA, which is mostly good — but a lot of the advisors doing it don't actually want to be business owners. They're doing it out of necessity, because it's the only obvious path to working with clients the way they want to.

"They get two, three, four years in and realize they're dealing with a whole bunch of stuff that has nothing to do with financial planning — compliance, marketing, managing a team, payroll, a tax stack. Accidental, unhappy business owners."

His answer is Advice-Only, a corporate RIA — the same tuck-in model that LPL and Ameriprise have run for decades, except built exclusively for advice-only advisors, which Fox believes makes it the only firm doing it. Advisors work under Advice-Only's registration instead of starting their own, and rather than surrendering a percentage of revenue the way most platforms take it, they pay a flat $18,000 a year that covers compliance, tech, and much of the rest. Registration was approved in February; Fox onboarded five advisors right away, then deliberately paused to make sure the operational infrastructure held before scaling up. The plan is to open the doors wider once the website is ready.

Tech that should be invisible

Fox has watched the RIA tech landscape expand enormously across his eleven years in the field, and he has opinions about where it's heading. The neat category boundaries — CRM here, data-gathering there, planning software, aggregation — are dissolving as tools bleed into each other, and he suspects that pushes the industry toward all-in-one platforms over the best-in-breed stacks he used to favor. He isn't uncritical. Hallucinations worry him in a field where you have to be accurate and able to explain exactly how you reached any answer, and data security scares him.

What excites him is integration: having a firm's scattered data — emails, meeting notes, account aggregation, written plans, the CRM — actually match and talk to each other, then export somewhere useful. He points to FastTrackr as an example of a company chasing exactly that. His caution is about proportion, not technology itself. At NextGen he once counted 31 different tech tools, and he's seen firms pour so much attention into their stack that recruiting, service, and marketing suffer for it. Tech, in his framing, should be an enabler — almost hidden — so advisors spend their time on clients rather than software.

The business case nobody talks about

Fox's sharpest point is that the advice-only conversation has been stuck on ethics when the business argument is just as strong. He rattles off the advantages that rarely get airtime. Client acquisition costs can run close to zero because so many people want this help and can't get it — against the roughly $1,000 to $4,000 per client that benchmark surveys peg for traditional RIAs. Revenue collection is immediate: the client pays when the work is done, no quarterly AUM drip or multi-year insurance trails. Compliance is simpler once you can strip investment management off your ADV. There's no trade-error or wire-fraud exposure because the firm never touches client accounts. Client counts can go higher, and planning stops being a loss leader and becomes the main revenue source.

And the market is the whole game.

"With an AUM practice, maybe 2 percent of the population is your starting point. With advice-only, it's like 99 percent of people. That's an enormous difference."

What Fox finds most striking is that clients — not advisors — are driving the shift. Planners who go advice-only tend to build months-long waiting lists fast, because demand was always there. The execution question that skeptics raise — how you help clients act without touching their accounts — Fox answers by reframing it. The hard part is the thinking: figuring out the right approach and helping someone make an informed decision. The execution is easy, and clients can do it themselves with a screen-share, a short video guide, or a walk-through during a meeting. There's no reason to charge for the clicking when the value is in the counsel.

Off the clock, Fox's life is mostly his two young kids, plus a return to running — he's signed up for a marathon and, by his own account, still pushing too hard for someone his wife keeps reminding is no longer a 20-year-old Marine. It fits the man: a bias toward doing the harder, more useful thing, whether that's serving the clients everyone else skips or building the platform that lets other advisors do the same.