Since First Ascent Asset Management launched its flat fee pricing structure a month ago, the number of advisors using the firm’s outsourced portfolio management services has nearly quadrupled.

First Ascent charges advisors who use its outsourced portfolio management strategies a flat fee of $500 per account, regardless of account size.

When the firm launched in June, it capped fees at $1,500 on discretionary accounts and $1,000 on nondiscretionary accounts.

At the end of last year, First Ascent decided to offer to a handful of advisors the opportunity to open accounts at the $500 flat fee, as a way “to try and get business in the door before the end of the year,” according to Scott MacKillop, CEO of the Denver-based firm.

And it worked. In January, First Ascent rolled the flat fee out to all advisors before officially announcing the pricing change in February.

“We should – in a very short period of time – have over 40 advisors working with us,” MacKillop told ThinkAdvisor. “The pricing did make a big difference. So we very quickly decided to make that our pricing policy.”

By the end of the year, First Ascent had seven advisors signed up. Then they changed their pricing, and since Jan. 1 they’ve brought on 27 advisors. They also have another 17 advisors on deck, “working on paperwork and getting them signed up to work with us,” MacKillop said.

While First Ascent has seen success with flat fee pricing, MacKillop admits it may not be for everyone.

“The flat fee idea works for us. It works for our business model, and so we’re going with it,” MacKillop told ThinkAdvisor. “It doesn’t necessarily work for everyone … Everyone should look at their own business to see what really would work.”

According to MacKillop, the assets under management fee schedule has worked “really well” for the industry for many years.

“When I first started in financial services, it was like 40 years ago, and that was the fee schedule,” he told ThinkAdvisor, adding, “I just think, it’s served the industry well, but at least in my case I had never thought of any alternative. It was such a fact of life that I just never questioned it. Like I accept the fact that the world is round, you know? I would never have asked the question.”

But, about three years ago, MacKillop started questioning AUM fees for firms like First Ascent.

“Because a firm like ours, with the technology that we have now available to us, it doesn’t cost any more to manage a million-dollar account than it does a thousand-dollar account,” he said. “I was struggling with the logic of a fee schedule that didn’t really reflect the amount of work that was required.”

Financial advisors need not worry that First Ascent’s move to flat fees is an attack on the AUM fee model, MacKillop said.

“I think some people view what we’re doing as an attack on assets under management fee schedule, but it’s really not intended to be,” he told ThinkAdvisor. “It’s a reflection of the fact that in our business I think (it’s) a more rational fee schedule.”

Even though First Ascent works with financial advisors, MacKillop admits they’re “fundamentally” a different business.”

“We could take a thousand accounts or 10,000 accounts or 50,000 accounts and manage them relatively efficiently without having to staff up,” he said. “If a financial advisor went from 100 clients to 500 clients they would have to hire a lot of people.”