Sales Tax Questions for a Registered Investment Advisor

Fees based on assets under management, a percentage of the portfolio charged quarterly or annually, are a regulated financial service fee, not a sale of goods or a taxable service, and no state applies sales tax to them. The same is true of flat financial planning fees and hourly advisory time. This is one of the more settled categories in sales tax: unlike professional services generally, where a handful of states carve out exceptions, AUM and planning fees do not have meaningful state-by-state variation worth tracking.

This means an RIA with no other revenue line genuinely does not need Anrok, Avalara, or any sales tax platform, and spending time evaluating either one is effort better spent elsewhere.

Some advisory firms have built a research service or a model-portfolio platform that other advisors subscribe to, separate from managing any client's actual assets. That subscription, billed on a recurring basis to firms that are not your own advisory clients, behaves like a software or information product rather than a regulated advice fee, and a state that taxes SaaS or information services may apply that rule to it.

A client-facing planning tool or a proprietary retirement calculator licensed to other RIAs sits in the same category: useful, potentially valuable, and taxed on a completely different basis than the AUM fee sitting next to it on your income statement.

If your firm bills a research subscription or model-portfolio license through a system like Stripe Billing, separate from any client AUM fees, Anrok applies SaaS-style taxability logic to that specific line and tracks nexus as it grows, without any risk of that logic touching your regulated advisory fees, which stay untouched by design.

A larger RIA running multiple registered entities, a broker-dealer affiliate, or a mix of advisory and licensed product revenue through an ERP tends to fit Avalara's broader coverage as the finance function grows past a single-purpose tool built for one subscription line.

Median pay for a staff accountant nationally is $83,680 a year, with the top quartile above $109,810¹, and a firm at that scale usually wants that role focused on client reporting and compliance work rather than manually tracking a small research-subscription tax obligation.

Ask one question: does any revenue on your income statement come from something other than AUM fees, planning fees, or advisory hours. If the honest answer is no, this decision is genuinely not urgent, and revisiting it once a year when you review your revenue mix is enough. If the answer is yes, a research subscription, a licensed tool, a model-portfolio product sold to other firms, that line is the one worth running through Anrok or Avalara, while your core advisory fees continue exactly as they are today.

• AUM, planning, and advisory hourly fees: outside sales tax in every state
• Research subscriptions or model-portfolio licenses sold to other firms: taxable where the state taxes SaaS or information services
• Licensed planning tools or calculators: confirm state by state, treatment varies

The mistake most firms make is treating the first outside subscriber to a research product as a one-off favor rather than the start of a new revenue line, which means nobody flags the tax question until the subscriber list has grown to a size where fixing it retroactively is a real project instead of a quick conversation with an advisor. A second, related mistake: billing the research subscription through the same invoicing flow as client AUM statements, which makes it easy for the two to blend together in the firm's own books even though a regulator and a tax authority would never treat them the same way.

Separating the two from the first invoice, even a single spreadsheet column marking which revenue is regulated advisory and which is a licensed product, saves a much harder cleanup later.