Program Pricing

Compensation within our Preferred Portfolio Services® (PPS) advisory programs is designed to reward you as your business grows. In addition to discounts based on account size, we have built-in methods—enhanced PPS payout levels and our Growing Advisor Program (GAP)—that allow us to share economies of scale.

PPS Growing Advisor Program with Enhanced Payouts

As your PPS AUM grows, we automatically reduce your advisor costs. When you reach a certain level of assets, we reduce your maximum administrative fee (cap) and increase your payout percentage. This cap reduces costs on small accounts while giving larger accounts the benefit of lower administrative expenses. 

Once you have at least $25 million in PPS AUM, you qualify for an increased payout percentage on your PPS management fees, starting at 90 percent and rising to a maximum of 99 percent. We calculate AUM at the end of each calendar quarter, looking at total AUM as well as individual account size. Whichever table drives the lower administrative fee is applied to the next quarterly billing cycle.

Total AUM

GAP Administrative Fee (bps)

Payout

$10,000,000+ 

17.5 

Production-Based Schedule 

$15,000,000+ 

15.0

Production-Based Schedule 

$25,000,000+

12.5

90%

$40,000,000+

11.0

90%

$50,000,000+

10.0

94%

$60,000,000+

9.5

94%

$75,000,000+

8.75

94%

$100,000,000+

7.5

95%

$150,000,000+

6.5

96%

$200,000,000+

6.25

96%

$250,000,000+

6.0

97%

$300,000,000+

5.75

97%

$350,000,000+

5.5

97%

$400,000,000+

5.25

97%

$450,000,000+

5.0

97%

$500,000,000+

4.75

98%

$750,000,000+

4.5

98%

$1,000,000,000+

4.25

99%

$2,000,000,000+

4.0

99%

GAP with Enhanced Payout Pricing Comparison

Example: The client has a portfolio of $250,000 and is paying a 1.25 percent management fee.

  • Standard pricing assumes an advisor with an annual gross production of $500,000 and less than $25 million in PPS AUM receiving an 88 percent payout.

  • GAP enhanced pricing assumes an advisor with $50 million in PPS AUM receiving a 94 percent payout.

Based on this scenario, an advisor gains $313 annually with the GAP enhanced payout pricing.

Standard Pricing

GAP with Enhanced Payout Pricing

$250,000 x 1.25%

$3,125

$3,125

@ Payout

$2,750

$2,938

PPS Administrative Fee

($375)

($250)

Net Advisor Compensation

$2,375

$2,688

You may charge clients an annual advisor fee for accounts in the PPS program. See the Manage Portfolios Yourself and Delegate Portfolio Management pages for details on maximum charges and guidelines. The annual advisor fee is subject to an administrative fee and your payout. It is debited quarterly and paid to you monthly. Fees are subject to change.

Commonwealth reserves the right to revise fee schedules, which could result in a change to the fees and charges imposed on individual advisors and/or their clients. Generally, any such changes would be due to industry or regulatory trends that lead to increased Commonwealth expenses, the inclusion of advisor- or client-specific programs or features, or for other reasons Commonwealth, in its sole discretion, deems necessary or appropriate.

PPS Administrative Fee

The fee associated with PPS program infrastructure, called the administrative fee, is absorbed by advisors and based on client account size, as follows:

Client Account Size

PPS Administrative Fee (bps)

$25,000+

20.0

$250,000+

15.0

$500,000+

12.5

$750,000+

10.0

$1,000,000+

7.5

$1,500,000+

5.0

$5,000,000+

Additional discounts apply for accounts greater than $30 million.

2.5

Earn more revenue by charging clients for services beyond investment management.

Consulting for a Fee