AUM.
In plain English
AUM stands for Assets Under Management. It is the dollar value of everything a fund, asset manager, or financial advisor is responsible for investing on behalf of clients. AUM grows two ways: market appreciation and net new client money. It shrinks when markets fall or clients withdraw. Most advisor fees are a percentage of AUM (typically 0.5% to 1.5% per year), so AUM is also the basis for the biggest cost most clients pay.
01Why it matters
AUM tells you how big a manager is, not how good. A massive AUM can mean trust and longevity, or just early luck that snowballed. Because fees scale with AUM, a 1% fee on a $500,000 portfolio costs $5,000 a year whether the manager beat the market or lagged it.
02The math, step by step
BlackRock manages roughly $11.5 trillion in AUM, the largest asset manager in the world. A typical robo-advisor like Betterment manages tens of billions. A solo registered investment advisor often manages $50 million to $500 million.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
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