What You Need to Know About Average AUM for Financial Advisors

In wealth management, one metric can shape nearly everything: assets under management (AUM).

It’s more than just a number. It reflects your client base, your business model, and how effectively you convert trust into long-term value.

As a financial advisor, what does it mean for your growth?

Whether you're just starting your advisory business or managing high-net-worth clients with complex portfolios, understanding the average AUM for financial advisors can help you benchmark success and plan your next steps.

In this guide, we'll cover all you need to know about that.

What Is AUM?

AUM represents the total value of assets you oversee, from mutual funds and IRAs to brokerage accounts and retirement plans. Simply put, it’s the measure of how much wealth your clients have entrusted to you.

Why AUM Impacts More Than Just Numbers

Your AUM doesn’t just affect bragging rights. It directly influences:

• Your revenue: Most advisors charge a percentage of AUM. More assets mean more income.
• Firm valuation: If you ever sell, merge, or plan succession, your AUM helps determine what your firm is worth.
• Client service tiers: Clients with higher AUM often receive more attention, services, and planning options.

Does AUM Matter More Than Client Count?

Not always, but it usually does.

You could have 200 clients, but if each one only brings $20,000 in assets, your total AUM (and revenue) will be limited.

On the other hand, a lean book of 40 high-net-worth clients with multimillion-dollar portfolios can support a thriving practice.

It’s about the right balance. The most successful financial advisors know that growing AUM with the right clients is more effective than just adding volume.

Average AUM by Firm Size and Business Model

There’s no one-size-fits-all when it comes to the average AUM for financial advisors, but recent data from the Investment Adviser Industry Snapshot 2024 by the Investment Adviser Association gives us a clearer picture of how firms are distributed by size and what’s typical for most advisors in the industry.

Here are the key takeaways:

AUM Varies Widely, but Most Firms Are Small

Despite the image of billion-dollar wealth managers, most SEC-registered investment advisors are relatively small businesses:

• 68% of firms manage $1 billion or less
• 92.7% of firms have 100 or fewer employees
• 88% of firms manage under $5 billion in assets

In fact, if we narrow it down further, more than half of all firms have between $100 million and $1 billion in assets under management (AUM). These firms often work with high-net-worth clients, provide financial planning services, and focus heavily on maintaining strong client relationships.

The "Typical" Investment Advisor

Here’s a snapshot of what a typical advisor in a firm works with, based on 2023 data:

• $305 million in AUM
• Seven employees
• 383 individual clients
• 14 institutional clients
• Two pooled vehicles (like mutual or private funds)

These firms tend to offer a mix of financial planning and investment management services, helping clients set long-term financial goals and manage portfolios aligned with their needs.

Larger Firms Manage Most of the Industry’s Assets

While smaller firms are more common, the biggest players hold most of the money.

For instance, firms with more than $5 billion in AUM manage over 92% of total industry assets, and over 200 of the largest firms manage 66.1% of the entire industry’s assets

The average across all firms? About $8.3 billion, but this is heavily skewed by outliers at the top.

Growth Favors the Giants

Over the past decade, firms managing over $100 billion saw the fastest growth, averaging 10.1% annually. Much of this growth came from firms scaling up into this tier or benefiting from favorable market conditions.

Meanwhile, firms with less than $100 million in AUM tend to shrink, either exiting the industry or growing into the next tier during bull markets.

What Influences an Advisor’s AUM?

A financial advisor's AUM is shaped by far more than just market returns. Your growth, or stagnation, can often be traced to a few core factors:

Client Base Composition

Serving high-net-worth or mass-affluent clients significantly impacts AUM.

An advisor working with physicians or business owners, for example, may accumulate far more per-client assets than someone serving early-career professionals or those with limited savings.

Business Model and Fee Structure

Advisors charging a flat fee or hourly rate often have lower AUM because their value isn’t directly tied to portfolio size.

In contrast, those operating on an AUM-based model are incentivized to grow assets, both by attracting more clients and by increasing wallet share from existing ones.

Niche or Specialization

Focusing on a well-defined market like retirees, tech executives, or medical professionals can lead to deeper relationships and larger portfolios.

These niches often come with unique planning needs, such as tax planning, equity compensation, or estate strategies, which justify greater consolidation of assets.

Marketing and Client Acquisition

Your ability to attract new clients also plays a major role.

Firms with structured marketing tools and funnels, clear messaging, and visibility in the right channels (referrals, partnerships, digital content) tend to scale AUM more quickly.

Retention and Service Quality

Keeping clients engaged and happy matters just as much as bringing in new ones.

High retention, combined with excellent service, financial planning, and investment management, leads to long-term growth through compounding and referrals.

AUM isn’t built in a day. It’s the product of intentional choices across positioning, pricing, marketing, and delivery.

What’s Considered a "Good" AUM for Financial Advisors?

There’s no universal benchmark for what makes an advisor’s AUM "good." It depends entirely on the goals of your practice, the type of clients you serve, and the way your business is structured.

Solo advisors who focus on high-touch, personalized planning may thrive with fewer clients and leaner operations, for instance.

Meanwhile, larger firms may prioritize scaling asset management to support multiple advisors and services under one roof.

Profitability Over Size

Rather than chasing a specific AUM figure or forcing yourself to submit to an AUM model, focus on whether your assets under management support the sustainability of your business.

A "good" AUM allows you to cover overhead, invest in digital tools, serve clients effectively, and meet personal income targets, all without overextending.

Client Experience Matters

Managing more money is only useful if it doesn’t come at the expense of your service quality.

If you can grow AUM while continuing to deliver personalized guidance and meet your clients’ financial goals, regardless of the number of clients you have, that’s a sign your business is on the right track.

Growth Should Be Aligned with Capacity

Rapid growth might sound appealing, but it often leads to operational strain. A solid AUM allows you to scale at a pace that doesn’t compromise your clients' interests, satisfaction, compliance, or internal efficiency.

The "best" AUM is one that fits your goals and your ability to maintain excellent service.

Tips for Growing Your AUM Strategically

Many advisors make the mistake of chasing volume instead of value. But growing your AUM isn’t about onboarding anyone with a portfolio. It’s about building meaningful relationships with the right clients, even if that means fewer assets.

That often means prioritizing high-net-worth individuals who can make enough revenue, those with complex needs, and long-term potential.

Build Deeper Relationships, Not Just Bigger Lists

Rather than stretching yourself across hundreds of smaller clients, consider doubling down on the households already under your care.

Deepening those relationships through a holistic approach, like offering investment management, retirement planning, and tax strategy, can grow wallet share and reduce churn.

Leverage Systems to Free Up Your Time

Time spent managing admin tasks or tracking individual stocks manually is time you’re not using to build trust, close referrals, or serve top-tier accounts.

To scale efficiently, lean on a tech stack that helps you automate marketing and communications, manage client portfolios, and maintain visibility across accounts.

Align Fees and Value

AUM fees are only justified when clients see real value in the way you deliver investment management. Whether you operate under a flat-fee, hybrid model, or tiered pricing, your service delivery must match expectations.

When clients feel that the cost they're paying is translating well into proactive guidance, not just performance reports, they’re more likely to stay and refer.

Turn Every Lead Into AUM with Bizware’s Advisor-Focused CRM

To increase your AUM, you need more than good service. You need the systems to scale it.

That’s where Bizware delivers.

Built specifically for advisors and advisory firms, Bizware helps you convert more leads, stay engaged with top prospects, and follow up consistently, without adding to your workload, with tools for:

• Automated lead nurturing
• Integrated appointment scheduling
• Unified email, SMS, and web chat
• Pipeline visibility and follow-up triggers

Ready to grow your advisory business with less friction and more precision? Try Bizware today and start growing your assets under management smarter.

FAQs About Average AUM for Financial Advisors

What is the average AUM of a financial advisor?

While it varies, the average SEC-registered financial advisor manages around $393 million in total assets, with a median closer to $305 million. Most operate with fewer than nine employees.

What is a reasonable AUM fee?

Many advisors use the industry standard of 1% of AUM, though some firms adjust based on portfolio size. Larger portfolios may see tiered or discounted rates.

What is the 80/20 rule for financial advisors?

This refers to the idea that 80% of a firm’s revenue often comes from 20% of its clients. Focusing on those top relationships can help advisors scale efficiently.

Is 1.5% high for a financial advisor?

For smaller accounts or those receiving extensive holistic financial planning, 1.5% may be justified. However, it's considered above average and may not be sustainable across larger portfolios.

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