Assets under management (AUM)

01

How to interpret an AUM figure

AUM is commonly used as a size measure, but the label alone does not guarantee comparability. A firm may publish marketing AUM under its own methodology, while Form ADV requires regulatory assets under management under prescribed instructions.

Before comparing two AUM values, verify the reporting entity, included accounts and assets, gross or net treatment, currency, valuation date, and treatment of affiliates or subadvisory assets.

02

How is AUM calculated?

There is no single calculation rule for every use of the term AUM. A publisher may total the market value of included client portfolios and apply its own rules for cash, leverage, subadvised assets, affiliated entities, or uncalled commitments. Form ADV regulatory AUM uses a prescribed regulatory method instead.

A defensible AUM figure should state who calculated it, which accounts and assets it includes, whether it is gross or net, the currency, and the as-of date.

03

What does a 1% AUM fee mean?

An asset-based advisory fee is commonly expressed as an annual percentage of the assets in an account. At a simple 1% annual rate, $500,000 of billed assets corresponds to $5,000 per year before considering billing frequency, tiered schedules, valuation changes, minimums, or other fees.

This arithmetic explains the label; it does not determine whether a particular fee or service is appropriate. Review the adviser’s agreement, Form ADV brochure, Form CRS, and actual dollar costs.

04

What AUM does not mean

• AUM is not the firm’s balance-sheet assets.
• AUM is not revenue, profit, or investment performance.
• AUM is not automatically the same as regulatory AUM.
• AUM is not the total value disclosed in a Form 13F information table.

05

Is higher AUM automatically better?

No. Higher AUM describes scale under a stated method; it does not establish performance, service quality, suitability, fees, conflicts, or financial strength. Use AUM as one factual attribute and inspect the underlying adviser record, services, disclosures, and reporting date.

06

How AUMSearch labels it

AUMSearch should use “regulatory AUM” for the Form ADV measure, “13F disclosed value” for an aggregate of reported 13F positions, and “firm-published AUM” only when the figure comes from a firm source with its stated date and method.