What is transaction based pricing in the context of a Registered Investment Advisor (“RIA”)?

Definition: In RIA context, this typically refers to when a custodian prices the custodial services they provide for an RIA based in part on charging a fee for trade transactions that occur in client accounts.

When used in an RIA context: “The custodian charges a transaction fee for each equity trade in the RIA’s accounts.”

See also: Episode 23, Custodian, Asset Based Pricing