Wealth Management Break-Even Analysis: $170K Monthly Revenue

Fixed costs $132.3K/mo Base burn

Contribution margin 78% After variable

Break-even revenue $169.6K/mo Revenue needed

Break-even timing Month 19 Model break point

Break-even calculator

Use this to test whether monthly advisory revenue covers direct client costs and fixed monthly overhead.

Lean Base Full

Monthly revenue Monthly advisory revenue drives the margin available to cover fixed costs. $ Low revenue High revenue Variable expenses These are direct costs that rise with client activity, like events, research, and certifications. $ Low direct cost High direct cost

Money available to cover fixed costs $119,000 $131,000 revenue - $12,000 variable expenses

Margin ratio

91%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead your contribution margin must cover before profit starts. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which wealth management expenses are fixed, and which move with sales?

Cost classification

Break-even is reliable only when fixed overhead, step-up staffing, and revenue-linked expenses are separated. In the first year, recurring overhead and payroll carry the model while variable expenses take 22% of revenue before contribution margin.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Use $12,000 per month as base overhead from Month 1 through Month 60.	Tying rent to client count instead of capacity.
Technology and Software Licensing	Semi-fixed	Start with the $8,500 monthly base, then step it up when users, seats, or operating scale rise.	Ignoring seat increases as the team grows.
Compliance and Legal Fees	Fixed	Model $6,000 per month as required operating overhead, not a discretionary spend.	Treating required compliance as optional.
Professional Insurance	Fixed	Include $3,500 per month above the break-even line as recurring operating protection.	Burying insurance below operating expenses.
Advisor and Staff Compensation	Semi-fixed	Year 1 payroll is about $77,292 per month, based on $927,500 annual wages across planned full-time equivalents.	Calling all staffing variable when most payroll is committed.
Marketing Spend	Semi-variable	Use the Year 1 budget of $20,000 per month and test acquisition against the $4,000 customer acquisition cost.	Assuming spend converts into clients instantly.
Third-Party Research and Data Services	Variable	Deduct 8% of Year 1 revenue before calculating contribution margin.	Leaving research costs out of service delivery margin.
Portfolio Management Platform Fees	Variable	Deduct 5% of Year 1 revenue because the fee moves with managed client revenue.	Modeling platform fees as flat software overhead.

How does break-even shift across lean, base, and full-service wealth management?

Scenario table

Fixed costs rise as the team and marketing scale, while the margin only improves gradually. That pushes the break-even bar from about $169.6k a month in the lean launch to $353.9k in the full-service setup.

Planning figures only. These scenario outputs are model-based assumptions, not guarantees.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch, Year 1	$97.6k	$21.5k	$132.3k	78.0%	-$56.2k	Still below break-even; launch risk is high.
Growing boutique, Year 3	$380.9k	$70.5k	$222.9k	81.5%	$87.5k	Past break-even, with the base model reaching Month 19.
Full-service setup, Year 5	$877.5k	$131.6k	$300.8k	85.0%	$445.5k	Wide cushion, but revenue must stay strong to cover overhead.

What breaks the break-even plan if revenue slips or costs creep up?

Stress test

The plan is most fragile if assets under management (AUM) fee generation slows, onboarding drags, or payroll and compliance costs creep up. A 15% revenue miss already leaves about a $198K monthly operating gap.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$1.696M	$0 gap	Very little cushion; results depend on hitting the fee plan.
Revenue shortfall	Revenue drops 15% to about $1.442M.	$1.696M	$198K gap	Top-line softness quickly turns into a monthly cash drain.
Fixed-cost pressure	Fixed costs rise 10% to about $1.455M a month.	$1.866M	$132K gap	Payroll or rent creep pushes the break-even bar higher.
Margin pressure	Variable expenses rise to 27%, cutting contribution margin to 73%.	$1.812M	$85K gap	Fee pressure and servicing costs eat into the monthly cushion.
Combined pressure	Revenue drops 15%, fixed costs rise 10%, and variable expenses rise to 27%.	$1.995M	$402K gap	This is where a CAC miss and payroll creep can break the plan.

What must be true before you sign the lease and hire the team?

Founder checklist

Don’t commit to rent, senior hires, or launch spend until signed or near-signed fee revenue can cover about $170K a month. Year 1 pricing and mix point to about $3,765 per active household, so break-even is roughly 45 households; if the pipeline can’t support that, delay the fixed cost.

1Demand Proof$170K/mo

Verify signed or near-signed fee revenue can hit the monthly break-even target, because promise-based pipeline does not pay fixed costs.

2Client Mix$3.8K/mo

Test the Year 1 mix of 85.0% investment management, 70.0% financial planning, 45.0% estate planning, and 60.0% tax optimization, since it supports about $3,765 per active household and roughly 45 households at break-even.

3Fixed Load$35K/mo

Keep the nonpayroll base at $35,000 a month and avoid locking in the $12,000 office lease too early, because overhead can outrun demand fast.

4Payroll Ramp$77.3K/mo

Phase hiring to capacity, since Year 1 base payroll is about $77,291 a month before benefits or later FTE changes, and every hire must support active households.

5Platform Ready$295K by M7

Confirm CRM, client portal, and document handling are working before launch, because the build already carries $295,000 through Month 7 and delays push revenue out.

6Cash Cushion-$213K

Hold enough reserve for the Month 18 cash dip, because the model bottoms at negative $213,000 before breakeven in Month 19 and no investment result fixes an overhead gap.