An advisor called me up and asked whether it was appropriate if an auditor charged an asset-based fee for the audit. I didn’t say no, but I question the reasonableness as to why an auditor would charge more for an audit of a larger asset-sized plan.
To me, an audit is an audit, one audit fits all. I don’t charge extra for my plan document for larger plans. The advisor said a larger plan does have potentially more liability, but I always think that’s what malpractice insurance is for. To this day, I still don’t know why non-producing third-party administrators charge an asset-based fee. My point is that unless you handle assets, an asset-based fee isn’t appropriate, but that’s just my opinion.
