Chartered Investment Manager (CIM) Practice Exam · Question
An investment firm offers different fee structures to clients. Which of the following is an example of an 'asset-based' fee?
An asset-based fee, common in wealth management, is calculated as a percentage of the total value of the client's assets managed by the firm.
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Question: An investment firm offers different fee structures to clients. Which of the following is an example of an 'asset-based' fee?
Answer options:
- A flat fee of $1,000 per year for all services.
- A commission charged per executed trade. ✅ A percentage of the client's total assets under management (AUM).
- A fixed hourly rate for financial planning advice.
Correct answer: A percentage of the client's total assets under management (AUM).
Explanation: An asset-based fee, common in wealth management, is calculated as a percentage of the total value of the client's assets managed by the firm.
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