What Is Assets Under Advice (AUA) Fee in Investment Advisory?

Investors comparing advisory pricing models should understand how AUA fee investment advisory works, what the current SEBI fee limits are and how to calculate whether AUA or fixed-fee pricing would be more cost-effective for their specific portfolio size and advisory needs.

This guide explains AUA fee investment advisory, how the AUA percentage is calculated and applied, what SEBI's current fee framework specifies and what investors should verify before signing an AUA-based advisory agreement.

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How AUA Fee Is Calculated

In AUA fee investment advisory, the advisory fee is calculated by multiplying the investor's portfolio value (the assets under advice) by the agreed annual percentage rate. For example, if the AUA percentage is 1.5% annually and the investor's portfolio is Rs 50 lakh, the annual advisory fee is Rs 75,000. If the portfolio grows to Rs 75 lakh, the fee increases proportionally to Rs 1,12,500. This percentage-based calculation means the absolute fee amount changes with portfolio performance, unlike a fixed-fee model where the amount is static regardless of portfolio size.

SEBI's Current Fee Framework

SEBI's fee regulations for Investment Advisers specify limits on the advisory fee that can be charged to individual and HUF clients. These limits were revised in the SEBI IA fee circular of June 2025 and supplemented by subsequent guidance. The specific applicable percentage ceilings vary by client category (individual/HUF, non-individual, accredited investor). Investors should verify the current applicable limits directly from SEBI's official website or the IA's own disclosures at the time of subscription, as fee regulations can be updated by subsequent circulars after this article's publication date. The AUA fee investment advisory framework discussed here applies throughout.

AUA Fee Aspect	How It Works	Investor Implication
Fee basis	Percentage of portfolio value (AUA)	Fee changes with portfolio performance
SEBI limits	Maximum percentage set by regulation	Cannot be charged above regulatory ceiling
Client category	Limits may differ by category	Verify applicable limit for your category
Billing frequency	Typically quarterly or annual	Verify billing basis (start or end of period)

AUA vs Fixed Fee: The Key Difference

AUA fee investment advisory is cost-predictable only in percentage terms, not in absolute rupee terms. A fixed-fee model charges a set amount regardless of portfolio size; an AUA model charges a percentage that results in a rupee amount that grows with the portfolio. For investors with larger portfolios, AUA fees can become disproportionately large relative to the advisory service's fixed cost of provision. For smaller portfolios, AUA fees may be more cost-effective than a fixed annual subscription that does not scale down with portfolio size.

What Investors Should Verify

Before signing an AUA-based investment advisory agreement, investors should verify: the specific AUA percentage being charged by the adviser, whether this is within the current SEBI-specified limit for their client category, how portfolio value is measured for AUA calculation purposes (beginning of period, end of period or average), the billing frequency and whether billing is based on committed capital or current market value. Platforms like Univest (SEBI RA Reg. No. INH000013776) operate as SEBI Research Analysts with a subscription-based model; their fee structure and its applicability to your investment approach should be verified on their official website before subscription. The AUA fee investment advisory framework discussed here applies throughout.

Compare Advisory Pricing Models Before Subscribing to Any Investment Advisory Service

Download the Univest iOS App or Univest Android App to understand AUA fee structures before committing to any SEBI-registered advisory arrangement. The AUA fee investment advisory framework discussed here applies throughout.

Conclusion

AUA fee investment advisory charges a percentage of the investor's portfolio value as the advisory fee, making the absolute fee amount proportional to portfolio size. SEBI sets maximum limits on these percentages that vary by client category and are subject to regulatory updates. Investors should verify the current applicable limits directly from SEBI guidance at the time of subscription. Before signing an AUA-based agreement, investors should verify the specific percentage, how portfolio value is measured and the billing frequency to calculate the expected annual cost for their specific portfolio.

FAQs

What is AUA fee in investment advisory?

Ans. AUA fee in investment advisory is a pricing model where the adviser charges a percentage of the investor's portfolio value (assets under advice) as the advisory fee. The absolute fee amount changes with portfolio performance: if the portfolio grows, the fee grows proportionally; if it declines, the fee declines. The percentage rate is agreed at the start of the advisory relationship and is subject to SEBI's maximum limits. The AUA fee investment advisory framework discussed here applies throughout.

How is the AUA fee calculated?

Ans. The AUA fee is calculated by multiplying the investor's portfolio value by the agreed annual percentage rate. For example, at 1.5% annual AUA fee on a Rs 50 lakh portfolio, the annual fee is Rs 75,000. The exact portfolio value used (beginning, end or average of period) and billing frequency (quarterly or annual) should be specified in the client agreement. Quarterly billing would typically charge one-fourth of the annual AUA fee each quarter. The AUA fee investment advisory framework discussed here applies throughout.

What are the current SEBI limits on AUA fees?

Ans. SEBI's June 2025 fee circular and subsequent guidance set maximum limits on AUA fees for different client categories. The specific applicable percentage ceilings vary by client category (individual/HUF, non-individual, accredited investor). Investors should verify the current applicable limits directly from SEBI's website or the adviser's disclosures at the time of subscription as these can be updated by subsequent circulars. The AUA fee investment advisory framework discussed here applies throughout.

How does AUA fee differ from fixed-fee advisory?

Ans. AUA fee charges a percentage of portfolio value resulting in a fee that changes with portfolio size. Fixed-fee advisory charges a set rupee amount regardless of portfolio size or performance. For larger portfolios, AUA fees in rupee terms may exceed the equivalent fixed-fee option for comparable services. For smaller portfolios, a fixed annual subscription may be more expensive than an equivalent AUA-based fee. Cost comparison depends on the specific portfolio size and the specific rates offered. The AUA fee investment advisory framework discussed here applies throughout.

Is AUA fee only for SEBI Investment Advisers?

Ans. When considering AUA fee investment advisory, aUA fee is specifically associated with SEBI-registered Investment Advisers under the IA fee regulatory framework. SEBI Research Analyst services typically use a subscription fee model rather than an AUA fee model. If a platform describes itself as charging AUA fees, it should be registered as a SEBI Investment Adviser; verify the registration category at sebi.gov.in.

What should I verify before signing an AUA-based advisory agreement?

Ans. Verify: the specific AUA percentage being charged, whether it is within the current SEBI limit for your client category, how portfolio value is measured for AUA calculation (beginning or end of period or average), the billing frequency, whether the AUA fee is all-inclusive or additional charges apply and the termination and refund policy for AUA fees paid in advance. These details determine your actual annual advisory cost.