What a 1% Fee Actually Costs Oil & Gas Executives at $3M, $5M, and $10M
The 1% AUM model charges a percentage of the total assets under management annually. In dollar terms, the cost is straightforward to calculate, and for oil and gas executives whose portfolios have grown through years of PSU settlements and RSU vesting, the numbers are significant.
| PORTFOLIO | $3,000,000 | $5,000,000 | $10,000,000 |
|---|---|---|---|
| 1% Annual Fee | $30K–$38K/yr | $50K–$63K/yr | $100K–$125K/yr |
| 1% AUM 10-Yr Real Cost | $537,254 | $537,254 | $1,615,445 |
| 1% AUM 20-Yr Real Cost | See note² | $2,754,703 | $5,509,407 |
| CWM Flat Fee 10-Yr Real Cost | $329,520 | $329,520 | $329,520 |
| CWM Flat Fee 20-Yr Real Cost | $919,640 | $919,640 | $919,640 |
| You Keep (10 Yr) | $207,734 | $478,202 | $1,285,925 |
| You Keep (20 Yr) | See note² | $1,835,063 | $4,589,767 |
¹ Real cost = fees paid + opportunity cost (fees compounded at 6% for remaining years). $5M and $10M figures assume 6% net annual return, fee applied to beginning-of-year balance. CWM flat fee = $25,000/yr comprehensive, all-inclusive; does not increase as portfolio grows.
² $3M 10-year figures match the published CWM analysis at concurrentfp.com/flat-fee-vs-aum-3-million-portfolio/ ($537,254 real 10-year cost, $207,734 you keep). For the full $3M 20-year projection, see that dedicated analysis.
The 20-year figures are where the gap becomes most visible. On a $10M portfolio, a 1% AUM fee costs $5,509,407 in real terms over 20 years, versus $919,640 under the CWM flat fee structure. The $4.5 million difference is not a rounding error. It is the compounding cost of a fee model that escalates with the portfolio automatically, without a corresponding increase in planning delivered.
For oil and gas executives whose portfolios grew through years of PSU settlements and RSU vesting taxed at 35–37%, paying an escalating fee on the appreciation of those after-tax dollars is a cost that most professionals have not modeled explicitly. The percentage format makes it easy to overlook. The dollar format makes it impossible to ignore.
Why the 1% Model Was Designed for a Different Client
The AUM fee model was not designed with oil and gas executives in mind. It was designed to make professional advice accessible to investors with modest portfolios, and to align advisor compensation with portfolio performance in a simple, scalable way.
The logic made sense at $200,000 or $500,000. A small portfolio struggles to support a meaningful flat planning fee. A percentage-based model made advice affordable and tied advisor revenue to outcomes. For a general investor with a standard 60/40 portfolio, the model is defensible.
Oil and gas executive compensation breaks that logic in three ways. First, the portfolio complexity doesn’t scale with asset size; it scales with compensation structure. A TechnipFMC executive with $3M in investable assets and a PSU cliff year approaching requires more specific planning work than a retired professional with $10M in a simple diversified portfolio. Charging 3x more for the larger portfolio doesn’t reflect 3x the planning value.
Second, the most consequential planning work for energy executives happens in specific windows: before a vesting event, before a retirement date, during a bonus year when tax strategy matters. It is not uniformly distributed across the year and it does not grow proportionally as the portfolio grows. A $5M portfolio does not require twice the planning work of a $2.5M portfolio when the equity structure is the same.
Third, the AUM model creates a subtle conflict around concentration. An advisor compensated on AUM has a financial incentive to keep assets under management. For an oil and gas executive with $1.5M in concentrated company stock, the advisor’s fee grows if that stock appreciates, whether or not the concentration represents a meaningful risk. A dollar-based flat fee removes that incentive entirely. The recommendation is the same regardless of where the assets sit.
The Planning Work That Oil & Gas Executives Actually Need, and When It Happens
Oil and gas executive financial planning is not primarily an investment management problem. It is a coordination problem. The decisions that determine financial outcomes over a 20-year horizon are not made continuously; they are made at specific inflection points.
Before a PSU cliff vest: modeling income across the full payout range (zero to 200% of target for TechnipFMC and SLB, zero to 2x for Oceaneering), projecting the combined tax liability with annual bonus and RSU vesting income, and adjusting estimated tax payments before the settlement date. This work has a defined window. Once the shares settle, the decision is made.
Before a retirement date: mapping every outstanding PSU performance period against the retirement date, calculating the Rule of 72 threshold for Cheniere executives, reviewing deferred compensation distribution elections, and stress-testing the retirement income plan across multiple scenarios. This work has a six-to-twelve month window. Retiring without this analysis costs real money.
During a high-income year: coordinating Roth conversion decisions, charitable giving strategy, estimated tax payments, and deferred compensation elections against a single calendar year where every decision interacts with every other decision. This work happens once per year and has a December 31 deadline.
None of this planning work scales with portfolio size. A $10M portfolio doesn’t require ten times the tax modeling of a $1M portfolio when the compensation structure is the same. The value of the advice is in the quality of the decision made at the right moment, not in the number of basis points applied to the balance. For a full breakdown of what that looks like in practice, see: financial planning services.
Four Mistakes Oil & Gas Executives Make When Evaluating Advisor Fees
The first mistake is comparing the fee percentage, not the dollar amount. One percent sounds reasonable until it’s translated to $50,000 per year on a $5 million portfolio. Most executives would not write a $50,000 annual check for advisory services without evaluating what they’re receiving. The percentage format obscures the dollar cost, intentionally or not,.
The second mistake is assuming fee and value scale together. A portfolio that grows from $3M to $5M because PSUs vested above target and were added to the investment account does not require 67% more planning work. The advisor’s fee grew 67% automatically. The planning scope did not.
The third mistake is ignoring the concentration incentive. Under an AUM model, an advisor managing $2M of the client’s $5M portfolio has a financial incentive for assets to move from outside the relationship to inside it. For oil and gas executives with company stock, deferred compensation, and 401(k) assets spread across multiple places, the question of which assets to consolidate under AUM management is not always neutral. A dollar-based flat fee removes this tension.
The fourth mistake is evaluating the fee in isolation from the planning delivered. The right question is not ‘is 1% reasonable?’ The right question is ‘is this fee structure aligned with the kind of planning I actually need?’ For most oil and gas executives, the answer is that a fee tied to the complexity of the plan is a better fit.
How a Dollar-Based Flat Fee Works for Oil & Gas Executives
A dollar-based flat fee is a defined annual fee set based on the scope and complexity of the financial planning engagement, not a percentage of assets under management. The fee is the same whether the portfolio is $3M or $10M, whether the PSUs vested above target or below, whether the market appreciated 20% or declined 10%.
At Concurrent Wealth Management, the dollar-based flat fee covers comprehensive financial planning and integrated investment management in a single engagement. The fee is established upfront, documented in the advisory agreement, and does not change as the portfolio grows. For oil and gas executives at TechnipFMC, EOG Resources, Cheniere Energy, SLB, and Oceaneering with complex equity structures and variable compensation, this structure means the advisor’s incentive is the quality of the plan, not the size of the portfolio.
The practical implication is alignment. When the advice is to diversify concentrated stock, the advisor’s recommendation is not affected by whether selling shares reduces AUM. When the advice is to defer compensation, the advisor’s fee doesn’t depend on whether that deferral moves assets out of managed accounts. When the advice is to pay a large estimated tax payment before year-end, the advisor isn’t calculating what that does to the fee base. The recommendation is the recommendation, not the recommendation that happens to preserve the fee.
At a $5M portfolio, the real 10-year cost of a 1% AUM fee is $807,722 versus $329,520 under the CWM flat fee, a difference of $478,202. Over 20 years the gap widens to $1,835,063. The math doesn’t change because the portfolio grew. It compounds because the portfolio grew.
When a Dollar-Based Flat Fee Is the More Aligned Structure
A 1% AUM fee can be appropriate in specific situations. For professionals with modest portfolios who need investment management more than comprehensive planning, the percentage model makes advice accessible and ties advisor revenue to portfolio size.
It becomes less appropriate when the portfolio crosses $2M–$3M, and the advisor’s primary value is comprehensive financial planning with investment management, not just a separate investment or planning focus. At that level, the annual fee in dollar terms typically exceeds what the same planning would cost under an all-inclusive flat-fee structure. With a dollar-based flat fee, the executive is paying for transparent and comprehensive financial advice.
It becomes genuinely misaligned for oil and gas executives with respect to PSUs, RSUs, concentrated stock holdings, deferred compensation, and complex tax situations. The most valuable advisory work for this group is investment management of a diversified portfolio, account location, and opportunistic investment and coordinating the decisions that occur at specific vesting events, retirement transitions, and high-income years.
That work aligns better with a flat, dollar-based fee rather than automatic fee escalation tied to portfolio growth. Paying a fee that automatically escalates creates a misalignment between what the advisor earns and what the advisor delivers.
The full side-by-side comparison, including the $5M fee illustration and the ten-year cost analysis, is on the flat fee vs 1% AUM comparison page. If you are currently in a 1% AUM relationship and your portfolio has grown above $2M, that page is worth reviewing.
What to Do Next
- Calculate the dollar amount of your current advisory fee not the percentage. Multiply your total AUM by 1% (or your actual fee rate) to get the annual dollar cost
- Ask your advisor whether your fee has grown as your portfolio has grown, and whether the planning work has grown proportionally
- Evaluate whether the advisory work you receive is primarily investment management or primarily financial planning coordination around your equity compensation and retirement decisions
- If your portfolio is above $2M and your compensation includes PSUs, RSUs, deferred compensation, or concentrated stock, request a fee comparison between your current structure and a dollar-based flat-fee alternative
- See how flat-fee pricing works at Concurrent Wealth Management
- See the full $5M flat-fee vs 1% AUM fee comparison table and 10-year cost analysis
Related Reading
- Oil & Gas RSU and PSU Planning: What to Do Before the Vesting Window Closes
- TechnipFMC PSU and RSU Planning: Why the PSU Is the More Complex Problem
- EOG Resources PSU: How to Handle the Tax Spike, Vesting Uncertainty, and Equity Compensation
- Cheniere Energy Rule of 72: How It Determines What Happens to Your RSUs at Retirement
- SLB Executives: How Your PSUs and Supplementary Benefit Plan Determine Your Retirement
Final Key Takeaways
- A 1% AUM fee costs oil and gas executives $30,000–$100,000 per year at $3M–$10M in assets, and grows automatically as the portfolio appreciates, whether or not planning complexity increases
- The most valuable financial planning work for oil and gas executives happens at specific decision windows PSU cliff years, retirement transitions, high-income tax years not continuously across the portfolio balance
- A dollar-based flat fee ties advisory compensation to the scope of the plan, not the size of the portfolio removing the conflicts that percentage-based models create around concentration, deferral, and asset location decisions
- The right question is not “is 1% reasonable?” it is “does this fee structure create alignment with the planning I actually need at this stage?”
About Dr. Preston Cherry
Dr. Preston Cherry is a Houston-based flat-fee fiduciary financial advisor and founder of Concurrent Wealth Management. He works directly with high-income Gen X professionals and oil and gas leaders on retirement, tax strategy, and investment decisions during major life transitions.
Concurrent Wealth Management provides all-inclusive comprehensive financial planning with integrated investment management, delivered through a transparent flat-dollar fee based on complexity and value, not a percentage tied to portfolio growth.
You can also explore how flat-fee compares to a 1% advisor fee.
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If you’re evaluating your current plan or thinking about your next move, you can see how all-inclusive financial planning pricing or schedule a no-cost, good-fit conversation.
Common Questions About Financial Advisor for Oil & Gas Executives
How much does a 1% financial advisor fee actually cost at $3M, $5M, and $10M?
Using a 6% net annual return and including both fees paid and opportunity cost, the real 10-year cost of a 1% AUM fee is $537,254 on a $3M portfolio, $807,722 on a $5M portfolio, and $1,615,445 on a $10M portfolio. Over 20 years those figures reach $1,785,000, $2,754,703, and $5,509,407 respectively. The CWM flat fee of $25,000/yr produces a real cost of $329,520 over 10 years and $919,640 over 20 years, the same at every portfolio size. Most oil and gas executives who built those portfolios through PSU settlements and RSU vesting taxed at 35–37% have not modeled what paying a percentage of that after-tax wealth costs in real terms over time.
Is a 1% AUM fee worth it for an oil and gas executive with PSUs and RSUs?
For most oil and gas executives with PSUs, RSUs, deferred compensation, and concentrated stock, a 1% AUM fee is not the most aligned fee structure. The most valuable financial planning work for this group happens at specific decision windows: before PSU cliff dates, before retirement, during high-income years; not continuously across the portfolio balance. A dollar-based flat fee, like the structure used at Concurrent Wealth Management under Dr. Preston Cherry, ties advisory compensation to the scope of the plan, not the portfolio size.
What is a dollar-based flat fee and how is it different from 1% AUM?
A dollar-based flat fee is a defined annual fee based on the scope and complexity of the financial planning engagement, not a percentage of assets under management. Unlike a 1% AUM fee, it does not grow automatically as the portfolio appreciates. At $3M or $10M, the fee is the same if the planning scope is the same. This removes the conflict built into percentage-based models around concentration, asset location, and deferral decisions.
Does a financial advisor fee grow as my oil and gas portfolio grows from PSU vesting?
Under a 1% AUM model, the fee grows automatically as assets under management increase. If a PSU settlement adds $300,000 to your investable portfolio, the annual advisory fee increases by $3,000 the following year, regardless of whether any additional planning work was required. Over years of above-target PSU payouts, this automatic escalation can add tens of thousands of dollars annually to the advisory cost without a corresponding increase in planning complexity.
At what portfolio size does it make sense to evaluate moving from 1% AUM to a flat fee?
The inflection point for most oil and gas executives is $2M–$3M in investable assets. Below that level, a percentage-based fee can make professional advice accessible and the dollar cost is manageable. Above $2M–$3M, especially with complex equity compensation, deferred income, and concentrated stock, the annual dollar cost of a 1% fee typically exceeds what comparable comprehensive planning would cost under a flat-fee structure. The comparison is worth making explicitly, not just in percentages.
How do I find a flat-fee fiduciary financial advisor who specializes in oil and gas executive compensation?
Look for a flat-fee fiduciary financial advisor with specific experience in oil and gas LTIP structures, including PSUs, RSUs, deferred compensation, and concentrated stock. Concurrent Wealth Management, founded by Dr. Preston Cherry, CFP®, is a Houston-based flat-fee fiduciary advisory firm serving oil and gas executives at TechnipFMC, EOG Resources, Cheniere Energy, SLB, Oceaneering, and other energy companies in Houston and nationwide. Schedule a confidential intro call to get started.
References
- Fee calculation methodology: 1% AUM fee applied annually to beginning-of-year portfolio balance; portfolio grows at 6% net annual return after fee deduction. Opportunity cost = each year’s fee compounded at 6% for the remaining years of the projection period. Real total cost = fees paid + opportunity cost. CWM flat fee = $25,000/yr. $5M 10-year figures verified against published CWM flat-fee vs 1% AUM comparison at concurrentfp.com/flat-fee-vs-1-percent-aum/.
- IRS Publication 550, Investment Income and Expenses, 2024. Internal Revenue Service.
- Envestnet. (2024). Capital Sigma: The Return on Advice. Envestnet Institute.
- IRS Revenue Procedure 2024-40. Applicable Federal Rates and Supplemental Withholding Rate for 2025. Internal Revenue Service.
