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Flat-Fee TAMP Makes a Splash

Barron's

February 27, 2017
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A startup TAMP is breaking new ground as a flat-fee (and very low cost) asset manager.

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A startup TAMP is breaking new ground as a flat-fee (and very low cost) asset manager, reports InvestmentNews.

First Ascent Asset Management, in Denver, charges $500 per advisor client. It’s landed only $5 million in assets and says another $50 million is on the way. Still, “there is reason to believe the model has struck a nerve,” InvestmentNews says.

“It doesn’t cost any more to manage big accounts than it does to manage small accounts, so why should the fees be different?” First Ascent CEO Scott MacKillop tells the publication.

MacKillop is a respected veteran in the asset management industry. He’s worked at Envestnet PMC and Frontier Asset Management.

Industry guru Bob Veres tells InvestmentNews that flat-fee asset management is a new concept even for advisors, and even though it’s “unheard of” among asset managers, it could catch on.

The extent to which that $500 fee is a bargain depends, of course, on the amount of assets invested. Paying $500 for $1 million of managed assets works out to 5 basis points.

One small advisor using First Ascent tells InvestmentNews that the dollar figure is easier for clients to grasp than a percentage of assets. Score one for transparency.