As the trend toward outsourced investment management continues to gain traction among financial advisers, simple economics suggests that the cost of that asset management will come down.

That’s the basic premise and business model being deployed by First Ascent Asset Management, which is billing itself as the first flat-fee asset manager, charging just $500 per adviser client.

“It’s such a simple idea, you would have thought somebody would have done it before now,” said Scott MacKillop, CEO of the fledgling turnkey asset management platform.

Mr. MacKillop, who has a solid reputation and resume in the asset management space, including stints at Envestnet PMC and Frontier Asset Management, is testing the limits of the status quo with his model.

“It doesn’t cost any more to manage big accounts than it does to manage small accounts, so why should the fees be different?” he said, taking a jab at those firms charging asset-based fees.

But even as First Ascent closes in on its 10th month in business, having gathered just $5 million in assets and another $50 million worth of commitments, there is reason to believe the model has struck a nerve.

“Let me first praise Scott for his entrepreneurial insight and energy, because new models always cause the more-established firms to think about what they’re doing,” said Chuck Widger, executive chairman of Brinker Capital, a $19 billion investment platform that charges between 40 and 50 basis points for the assets it manages on behalf of financial advisers.

“What they’re trying to do is really an unbundled model that hasn’t been tested yet,” Mr. Widger added.

Citing the recent trend of robo-advice platforms adding human advisers to tweak the service model, Mr. Widger said time will tell if First Ascent can survive on an annual flat fee of $500 per investor.

“Once they get up and running and start to learn how the business works, they’ll start to learn what they don’t know, and then they’ll have to increase their fees,” he added.

Meanwhile, Bob Veres, owner of Inside Information, viewed First Ascent’s efforts to make a splash with flat-fee asset management as something that could catch on, and potentially spread all the way to the mutual fund industry.

“The fee-only planning world is very slowly edging away from assets under management into a flat-fee model,” he said. “This transition is kind of bleeding-edge for advisers, but for the asset management industry it’s unheard of, but if you believe these trends follow each other, then it’s possible that flat fees are the future.”

The 20 portfolio variations offered up by Frist Ascent are clearly not for everyone, nor are they designed to be.

Constructed using mutual funds and exchange-traded funds, the model portfolios include five different levels of risk, tax-management, and a blend of active and passive underlying funds.

Beyond that, any customization increases the cost of the model.

But considering most outsourced asset management costs around 50 basis of the assets being managed, the $500 flat fee is a virtual steal.

At 50 basis points, an asset-based fee would reach $500 with just $100,000 under management. And the only way $1 million could be managed for $500 is if the fee was 5 basis points on assets.

So far, so good for Steve Hazel, managing partner at Hazel Financial, which launched as a registered investment adviser in 2014 and has $12 million under advisement.

“I like the transparency of it, because it’s pretty clear what the pricing model is,” Mr. Hazel said. “If you tell somebody they’re paying half of one percent of their assets, it can be hard for them to put that into dollars.”

The First Ascent fee, as with any platform using managed products, does not include the expense ratios of the underlying funds.

Sandra Gontero, who has been in the financial services industry for 35 years, launched her own RIA last year, and was drawn to First Ascent because “I don’t want to pick the investments.”

“Their platform and pricing made the third-party asset manager selection process simple,” she said.

At least three separate industry studies last year underscored the trend toward outsourced asset management as advisers focus more on client servicing and building their businesses.

The 2016 Northern Trust Study of Investment Management Outsourcing, conducted in partnership with InvestmentNews, found that 32% of RIAs outsourced asset management.

Mark Germain, chief executive of Beacon Wealth Management, is not yet ready to move the asset management function outside his firm, but he recognizes the appeal.

“Something like First Ascent might work for a planner who doesn’t understand the investment side, but on the other end of the spectrum there are RIAs that are investment professionals, who won’t want to outsource,” he said. “But, I definitely think there will be fee pressure at the outsourced-asset-management level for all the reasons that fee pressure is affecting the financial planning industry.”