Set out the common ways private wealth firms charge clients, earn revenue and pay their advisers

Clients may pay an asset-based fee, often tiered so the rate falls as assets rise, a fixed retainer, hourly charges, commissions on transactions or products, or occasionally a performance fee. Advisers are typically paid salary plus bonus or a share of the revenue they generate. For a tiered schedule of 1.00% on the first 5 million, 0.75% on the next 5 million and 0.50% above, a 15 million account pays 50,000 + 37,500 + 25,000 = 112,500, an effective 0.75%. Each structure carries incentives: commissions reward turnover, and asset-based fees can discourage advice that reduces assets under management, such as repaying debt or buying an annuity. Disclose these conflicts clearly.