Assets Under Administration vs Assets Under Advisement: A Side by Side Guide

If you work in wealth management long enough, you'll run into two terms that look almost identical on paper but mean very different things in practice. Assets Under Administration and Assets Under Advisement are both abbreviated to AUA, which doesn't help reduce confusion. But mixing them up can cause real problems for your compliance reporting, your client communication, and how you present your business.

Here's the short version. Assets under Administration refers to assets that a firm oversees for administrative purposes, like record keeping, custody, and reporting, without making any investment decisions. Assets under Advisement are assets for which an advisor provides guidance without having discretionary control to execute trades. One is about operational oversight. The other is about financial guidance.

Both metrics matter in wealth management, but they serve different purposes and show up in different contexts. And because they share the same abbreviation, it's easy to conflate them if you're not paying attention.

This article breaks down assets under Administration vs assets under Advisement, explaining what each term actually means, how they differ on key dimensions, and why the distinction matters for compliance, client relationships, and business growth. We'll also look at how both relate to the more familiar Assets Under Management (AUM) concept, so you can see how all three fit together.

One term is about who's handling the operational side of the assets. The other is about who's providing strategic direction. Both roles are valuable, but they're not interchangeable.

What Are Assets Under Administration (AUA)?

Assets Under Administration represent the total value of client assets a firm oversees for administrative purposes. The firm handles the operational side of those assets, but it doesn't make investment decisions. These are client-owned assets that the institution supports through back-office services, not portfolio management.

The types of services that fall under Administration are largely operational. Record keeping and reporting are big ones. That includes tracking account balances, logging transactions, generating performance reports, and producing client statements. Custody and safekeeping are other core functions in which the firm physically holds securities or funds on behalf of clients, ensuring they are secure and accounted for. Regulatory compliance and tax reporting also fall here, covering everything from filing required documents to preparing tax forms. And then there are the other back-office tasks, like settling trades executed by someone else, processing dividends and interest payments, and handling general account maintenance.

Banks, custodial firms, fund administrators, and trust companies are the most common users of this metric. It's how they measure the scale of their business. A large bank might report trillions in AUA because it provides custodial and administrative services to hundreds of investment funds, even though it isn't managing a single dollar of that money.

Here's a simple example. Imagine a trust company that holds and maintains records for a family's investment accounts. The total value of those accounts is $500 million. That entire amount counts as the company's assets under Administration. The trust company safeguards the assets and handles the paperwork, but a separate investment manager or the family itself decides how to invest.

A few key characteristics are worth noting. AUA involves zero discretionary control over investments. The service provider earns fees for administrative work, typically a small percentage of assets or a flat fee, but it has no responsibility for investment performance. And for many institutions, AUA is significantly larger than AUM, because they administer far more assets than they actively manage.

What Are Assets Under Advisement (AUA)?

Assets Under Advisement represents the total value of assets on which a financial advisor or firm provides advice or consultation without having discretionary control. The advisor is actively guiding the client on what to do with those assets, but someone else makes the final call. That someone is usually the client themselves or another manager handling execution.

This is where the overlap in abbreviations gets tricky. Assets Under Advisement is also shortened to AUA in industry conversations. For clarity, in this article, when we refer to AUA in an advisement context, we mean assets for which the advisor's role is guidance, not Administration or management.

There are a few common scenarios where assets under Advisement come into play. The most familiar is 401(k) advisory work. Say a client has $200,000 sitting in a workplace retirement plan. Their independent financial advisor might review the fund options, recommend an allocation strategy, and suggest rebalancing at specific intervals. But the advisor can't log in to that 401(k) to make trades. The client has to do it themselves. That $200,000 counts as assets under Advisement for the advisor.

Another common scenario involves held-away assets. An advisor preparing a comprehensive financial plan might weigh in on a client's real estate holdings, employer stock options, or investment accounts managed by a different firm. The advisor's recommendations touch all of those assets, even though the advisor isn't managing them day to day. Those values get counted under Advisement because they fall within the advisor's scope of guidance.

It's important to note that these assets are not part of the advisor's Assets Under Management. There's no discretionary mandate in place. The advisor isn't executing trades or making allocation changes on the client's behalf. But that doesn't mean these assets are irrelevant. They still reflect the advisor's reach and the depth of their client relationships. Many firms report assets under Advisement to show the complete picture of what they're helping clients navigate.

In practice, reporting AUA in an advisement context is often optional. Advisors may include it in marketing materials or in their Form ADV Part 2 brochure to give prospective clients a more complete sense of their advisory scope. But when they do, it needs to be clearly labeled and separated from AUM. Blurring that line creates compliance risk, which we'll get into shortly.

If assets under Administration are the operational engine keeping things running behind the scenes, assets under Advisement are the strategic voice in the room. The advisor coaches the client on how to play the game, but the client is the one making the moves.

The Key Differences Between Assets Under Administration and Assets Under Advisement

Now that we've defined each term on its own, let's put them side by side. This is the section you'll want to bookmark if you need a quick reference for how these two metrics compare across the dimensions that matter most.

Role of the Firm or Advisor

With assets under administration, the firm acts as an administrative service provider. It's a custodian, a platform, or a back office operation that oversees assets for safekeeping and reporting. With assets under advisement, a financial advisor is actively providing strategic guidance on those assets. The relationship is consultative, not operational. For example, a fund administrator holding $1 billion in hedge fund assets for reporting purposes is playing an administrative role. An RIA firm advising a client on that same $1 billion real estate portfolio, managed by a separate entity, is playing an advisory role.

Level of Control

Neither involves discretionary authority, but for different reasons. In Administration, there's no investment decision-making at all. The work is purely operational. In Advisement, the advisor makes recommendations and shapes strategy, but the client retains the power to accept, reject, or modify them. The influence in Administration is on processes and compliance. The influence in Advisement is on investment direction and financial planning.

Services Provided

Administration covers back-office functions such as recordkeeping, custody, trade settlement, and regulatory reporting. Advisement covers front-end advisory services like financial planning, asset allocation recommendations, portfolio reviews, and retirement projections. One is behind the scenes. The other is face-to-face.

Who Typically Reports This Metric

Banks, custodians, and fund administrators use AUA to demonstrate the scale of assets they support operationally. Wealth advisory firms and financial planners use AUA to reflect the full scope of assets they advise on, including those they don't directly manage. Same abbreviation, very different audiences. It's also worth noting that the same assets can show up in both categories simultaneously. A brokerage might count a client's assets under Administration because it provides custody, while an independent advisor counts those same assets under Advisement because they're providing guidance on them. Neither is wrong, but the context has to be clear.

Fee Structure

Administrative fees tend to be modest. They might be charged per account, as a small percentage of assets, or as a flat service fee. Advisory fees for assets under Advisement could take the form of planning, consulting, or hourly fees, or a bundled advisory fee. Both differ from the typical AUM fee model, in which advisors charge a percentage of the assets they actively manage.

Confusing these two metrics can lead to reporting errors or the appearance of misrepresentation. An advisor who counts assets under Advisement toward their AUM is inflating their regulated assets figure, whether they mean to or not. That's not just sloppy. It's a compliance problem that we'll dig into next.

Why This Difference Matters for Compliance and Reporting

For registered investment advisors, getting these labels right isn't optional. It's a regulatory expectation. And the consequences of getting it wrong go well beyond a clerical error.

The SEC draws a clear line between assets that an advisor manages on a continuous and regular basis and assets where the advisor's involvement is more limited. Only the first category counts as regulatory assets under management, or RAUM. Assets where the advisor provides occasional or non-discretionary advice don't meet that threshold. Those belong in the assets under advisement category, reported separately if reported at all.

This distinction has real implications for how advisors register. The SEC's $100 million AUM threshold determines whether an advisor registers at the federal or state level. If an advisor incorrectly includes assets under Advisement in their AUM calculation, they could exceed that threshold and trigger federal registration requirements they don't actually qualify for. Or worse, they could create the impression that they manage more assets than they do, which regulators view as a material misrepresentation.

When it comes to Form ADV, the rules are straightforward. Part 1 requires advisors to report their AUM. Assets under Advisement do not belong there. However, Part 2A of the brochure gives advisors the option to disclose assets under Advisement as a separate figure. Many firms take advantage of this to show the full scope of their advisory relationships. But the key word is separate. The two numbers need to stand on their own with clear labels and context.

As financial planning becomes more holistic, more advisors are choosing to report assets under Advisement alongside their AUM. It makes sense. Advisors want to show that their impact extends beyond the accounts they directly manage. But there's no standardized formula for calculating AUA in the advisory sense. That means firms need to document their methodology and be prepared to explain it if a regulator asks.

The bottom line is simple. Regulators expect advisors to count only truly managed assets in their AUM. Assets under Advisement can absolutely be reported, but only with proper context and clear separation. Getting this wrong isn't just confusing. It can trigger enforcement actions and erode the trust you've built with clients and regulators alike.

Why Smart Advisors Track Both AUM and AUA

AUM has always been the go-to credibility marker in wealth management. It tells clients and prospects how much money you directly manage, and it's the number most people associate with an advisor's scale. But AUM alone doesn't tell the full story of what you do for clients.

Consider an advisor who manages $500 million in client portfolios but also advises on an additional $300 million in 401(k)s, real estate holdings, and accounts held at other firms. If that advisor only leads with the $500 million figure, they're underselling the depth of their client relationships. Reporting assets under Advisement alongside AUM paints a more complete picture and signals to prospects that you're involved in the bigger picture of your clients' financial lives, not just the accounts you trade in.

That transparency also builds trust with existing clients. When you clearly separate what you manage from what you advise on, clients understand exactly where your responsibilities start and stop. Saying "we manage your IRA but advise on your 401(k) and real estate holdings" is honest, specific, and it actually strengthens the relationship. Blurring those lines, even unintentionally, can make informed clients feel misled.

There's an internal strategic benefit too. When you can see the full pool of assets you advise on, you start to spot growth opportunities. A large AUA figure often represents future AUM. Clients with held-away assets may eventually choose to consolidate under your management, especially if your advice on those assets has been strong. Tracking AUA gives you a way to measure that pipeline and plan around it.

Of course, monitoring multiple asset metrics across custodians and held away accounts takes good data management, and that's where financial advisor productivity often takes a hit. This is where the best AI tools for financial advisors make a real difference. Platforms like Jump can help with administrative tracking and client meeting preparation, so you spend less time reconciling spreadsheets and more time doing the advisory work that actually grows your business.

How AUA Relates to Assets Under Management (AUM)

Most advisors already have a strong grasp on AUM. It's the total value of assets you actively manage on a discretionary or ongoing basis. These are the accounts where you have the authority to make investment decisions, often without needing client approval for each trade. It's the number that shows up on your Form ADV Part 1 and the one clients most commonly associate with your firm's size.

So where do Assets under Administration and assets under advisement fit in relation to AUM?

Assets under Administration sit on the operational side. A firm might administer billions in client assets by providing custody, recordkeeping, and compliance reporting, without managing a single dollar of those assets. AUM, by contrast, means the firm is actively making investment decisions. The two can coexist at the same institution, but they measure very different things.

Assets under Advisement are closer in nature to AUM because it involves investment guidance. But it stops short of management. The advisor recommends, the client decides. With AUM, the advisor both recommends and executes. If Assets under Advisement are advice only, AUM is advice plus action.

A quick example makes this easier to see. Say your client Alex has $200,000 in a workplace 401(k) and $50,000 in an IRA that you manage directly. The $50,000 is part of your AUM. The $200,000 is Assets under Advisement because you're guiding Alex on allocation, but you can't trade in that account. Most advisors carry both. Some assets they manage directly, others they only guide.

All three metrics have a place in how you understand and communicate your business. AUM shows what you control. Assets under Advisement show what you influence. Assets under Administration show what you support operationally. Together, they give you a 360-degree view of your practice's reach, which matters when you're talking to prospects, evaluating growth, or comparing your firm against others in the industry.

Where This Leaves You

Assets under Administration and assets under Advisement may share an abbreviation, but they describe fundamentally different relationships with client assets. One is about operational oversight. The other is about strategic guidance. And both are distinct from assets under management, where the advisor has direct control over investment decisions.

Understanding these differences helps you in three practical ways. You stay on the right side of compliance by accurately reporting what you manage versus what you advise on. You communicate more clearly with clients by setting honest expectations for your role in each part of their financial life. And you get better visibility into your own business by tracking the full scope of assets you touch, not just the ones generating management fees.

As financial planning continues to move toward a more holistic model and technology makes it easier to aggregate data across accounts, tracking multiple asset metrics will become standard practice rather than a nice-to-have. Advisors who get comfortable with these distinctions now will be better positioned to grow their practices and demonstrate their full value to clients.

Managing all of this takes time, especially when you're juggling data across custodians, held-away accounts, and client reporting. The rise of wealth management AI is making this easier, and Jump was built for exactly this kind of work. As more advisors look for AI for financial advisors that actually saves time, Jump stands out by taking the administrative weight off your plate so you can focus on giving great advice. If you want to see how it works for your practice, schedule a demo and find out how much time you could get back.