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First Ascent Drops Fees to $500 on All Accounts


By Danielle Andrus | February 23, 2017

Industry Press

Asset manager trades fee caps for flat fees on all accounts.

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First Ascent Asset Management announced on Wednesday that it will begin offering advisors who use its outsourced portfolio management strategies a flat fee of $500 per account, regardless of the size of the account. The flat fee schedule is available for all new and current accounts.

When First Ascent launched in June, it capped fees at $1,500 on discretionary accounts and $1,000 on nondiscretionary accounts. However, Scott MacKillop, founder and CEO of First Ascent, said a flat fee was always his goal.

“We always had in mind that someday we would like to get to a flat fee,” he told ThinkAdvisor on Wednesday. He said his firm started experimenting with a flat fee scheme at the end of 2016.

“It was originally intended to just see if we could take some advisors who were going a little slow and get them to open some accounts with us,” he said. After getting a positive response from those advisors, the firm decided to offer flat fees to everyone.

“It seemed to resonate with advisors so we decided to just go with it. We did a little financial modeling to make sure it was something that was viable at this point in our history, and it looked like it was,” MacKillop said.

MacKillop believes it will take some time before flat fees catch on throughout the industry. “The asset management industry has been working on a percentage of assets under management fee schedule for so long, I don’t think people even think about it anymore,” he said.

The other obstacle to widespread use of flat fees is the infrastructure at established firms isn’t as flexible as newer firms.

“It’s not a decision you can make quickly,” MacKillop said of switching to flat fees from AUM-based fees. “We built our firm to be able to provide this kind of low-cost portfolio management service. We’re organized differently, our technology is different. We don’t have an army of wholesalers. Most asset management firms that have been around for a while, they have a lot of infrastructure that would make it really hard for them to switch to this kind of pricing.”

The firm uses a core-plus-satellite approach to building portfolios with limited positions in order to keep transaction costs low. It offers three core portfolios of index funds and ETFs that are supplemented by actively managed or indexed satellites.