Billing AUM Fees Off Moving Balances While Launching a Flat Planning Plan

Say a client's account holds an average daily balance that determines a 1% annual fee, billed quarterly and typically deducted directly from the custodial account by the custodian itself, not charged to a card or a bank account the firm controls. Neither Stripe Billing nor Chargebee is built to calculate a fee against a daily-fluctuating custodial balance or to initiate a deduction from an account the firm doesn't hold. Most RIAs calculate the AUM fee in their portfolio management or billing software, which is purpose-built for that calculation, and that number flows to the custodian for deduction, entirely outside a subscription billing platform's usual job.

The new flat-fee financial planning service, a fixed monthly subscription billed on a card or via ACH rather than deducted from a custodial account, is exactly the kind of recurring charge these platforms were built for. Set it up as a standard subscription in either one, entirely separate from the AUM fee calculation happening elsewhere. This is the part of an RIA's revenue that genuinely resembles a SaaS subscription: predictable amount, predictable date, collected directly rather than deducted from investments.

It might seem inefficient to run AUM billing through portfolio management software and planning fees through a separate subscription platform, but forcing both into one system usually means fighting the platform rather than benefiting from it. The AUM fee needs custodian integration, average daily balance calculations, and fee schedule tiers that most subscription billing tools have no concept of. The planning fee needs straightforward recurring billing with card retry logic and dunning that portfolio management software often handles poorly. Use each tool for what it's actually built for, and reconcile the combined revenue picture in your own general ledger rather than trying to force one platform to do both jobs.

Say a client has $2 million under management, billed quarterly at a tiered rate calculated by the firm's portfolio management platform and deducted by the custodian, and also subscribes to the new flat planning service at a fixed monthly rate charged to their card through Stripe Billing or Chargebee. These are two entirely independent billing events with different cadences, different collection mechanisms, and different systems of record. The only place they should ever combine is in the firm's own revenue reporting, where both get recognized as advisory revenue even though they arrived through completely different rails.

For a straightforward flat monthly planning fee with no tiers or complexity, Stripe Billing's lower cost and simpler setup usually covers what a smaller advisory firm needs. Chargebee starts to make more sense if the planning service itself has multiple tiers, say, a basic tier and a comprehensive tier with different services included, and the firm wants non-technical staff to manage tier changes and pauses directly rather than routing every client change through whoever set up the original Stripe integration.

Clients paying both an AUM fee deducted from their account and a separate flat subscription charged to their card sometimes lose track of which is which, especially if both were introduced around the same time. A short annual statement, separate from either billing system, that clearly lays out both fees and what each one covers goes a long way toward avoiding a client who feels double-billed without understanding why. Neither platform generates this summary automatically; it has to come from the firm's own client communication process.

Regulators reviewing an RIA's fee practices generally want to see a clear, documented explanation of how each fee is calculated and collected, and a firm running two disconnected billing processes for AUM and planning fees should have a short internal document describing exactly that split: which system calculates which fee, how each one is collected, and how the two reconcile into total advisory revenue. This documentation matters most during an exam or an audit, when being able to explain the billing architecture clearly and quickly reflects better on the firm than reconstructing the logic on the spot from two systems that were never designed to talk to each other.

Split the two fee types across systems this way:

• Calculate the AUM fee in portfolio management or billing software built for average daily balances and tiered fee schedules, then send it to the custodian for deduction.
• Set up the flat planning fee as a standard subscription charged to a card or ACH, separate from the AUM calculation.
• Choose Stripe Billing for a simple flat planning fee, and consider Chargebee if the service has multiple tiers that non-technical staff must manage.
• Send clients a short annual statement that explains both fees and what each one covers.
• Document internally which system calculates which fee, how each is collected, and how the two reconcile, so regulatory reviews find a clear explanation.