AI Fee Schedule Comparison for Advisor Prospects

A useful advisor fee comparison starts with documents and matching assumptions. AI can organize those documents and draft questions. It should not invent a missing charge, perform unchecked multi-year calculations or describe lower modeled fees as a guaranteed financial benefit.

Collect the terms before calculating

Request the relevant agreement, current fee schedule, statements and fund disclosures. A public maximum schedule may differ from a negotiated account rate.

The SEC's Form ADV brochure explanation describes disclosures about compensation, fee schedules, negotiability and other expenses. Use the current firm's documents to establish the actual account terms. Record the source, date and page for each input.

Capture the billing balance, billing frequency, breakpoints, minimums, flat charges, included services and expenses charged separately. Check whether a percentage is marginal by tier or applied to the entire balance. Identify whether a charge is already included in another expense figure before adding it.

Build an extraction table

An unknown value is not zero. Do not label a total "all-in" when material components remain unresolved. Fund expenses, transaction costs, transfer charges and taxes may require separate treatment.

A fixed-balance example

These are fictional assumptions for checking the method, not offered prices or projected investment returns.

Assume a constant $500,000 balance for one year, no transactions and no other charges:

• Arrangement A: a 1.00% advisory fee and a separate 0.25% weighted investment expense estimate.
• Arrangement B: a 0.75% advisory fee, a separate 0.40% weighted investment expense estimate and a $100 annual account charge.

On these assumptions, A is $5,000 plus $1,250, or $6,250. B is $3,750 plus $2,000 plus $100, or $5,850. The modeled difference is $400.

That comparison excludes balance changes, trading costs, taxes, transition costs and differences in service. It cannot establish which arrangement is suitable. Actual billing may use different valuation dates or methods, so reconcile the method before presenting even a one-year illustration.

Keep extraction and calculation separate

Extract the fee terms from these approved documents into the comparison table. Attach a document and page reference to each term. Flag conflicts, missing charges and ambiguous breakpoints. Do not calculate investment returns, recommend a transfer or substitute an estimate for a missing term.

A reviewer confirms the table before a tested calculator reads it. Test a balance at each breakpoint, below a minimum and immediately above a tier boundary. Verify whether flat charges are annual, quarterly or per account.

Do not ask a language model to supply a return assumption to make a comparison look complete. If a longer illustration is necessary, the firm's reviewer must approve the model, timing assumptions and presentation. Check the resulting numbers independently.

Review services and communication

Ask what each fee buys: planning, tax coordination, meetings, implementation, access and ongoing monitoring. Lower modeled cost does not establish equal service, lower risk or a better investment outcome.

Have the appropriate firm reviewer determine which advertising, recommendation and disclosure requirements apply. A particular disclaimer or favorable statement about a competitor does not automatically make a document compliant. Do not use a generic prompt as a legal signoff.

Preserve the calculation record

Save the approved input table, calculation version, assumptions and reviewer corrections under the firm's policy. Keep client information inside approved systems.

Before sharing, check the totals, units, scope and unresolved costs. Ask a second person to reproduce the fixed-balance example from the stated inputs. If they need an unstated assumption, the explanation needs another edit.