Frequently Asked Questions
Does a 1 percent fee really only cost 1 percent?
No. Because the fee is charged every year, the lost growth compounds. Over several decades a 1 percent fee can reduce an ending balance by far more than 1 percent.
Is an advisory fee always bad?
Not necessarily. A good advisor can add value through planning, tax efficiency, and behavior coaching. This tool shows only the cost side so you can weigh it against the value received.
What is a typical AUM fee?
Around 1 percent of assets per year is common, often declining for larger balances. Flat-fee and hourly advisors are alternatives worth comparing.
Is this investment advice?
No. It is a general estimate and is not investment or financial advice. Actual returns vary and are not guaranteed.
What is an AUM fee?
AUM stands for 'assets under management.' The advisor charges an annual percentage of your portfolio's value, typically between 0.5 percent and 1.5 percent. The fee is deducted directly from the portfolio, so it reduces both your principal and its future returns.
Are there cheaper alternatives to AUM-based advisors?
Yes. Flat-fee advisors charge a fixed amount for the plan, hourly advisors bill for their time, and robo-advisors typically charge between 0.15 percent and 0.40 percent per year. Comparing the total dollar cost over your investment horizon helps you decide.
Does the calculator include fund expenses?
No. It only models the advisor's AUM fee. Mutual funds and ETFs carry their own expense ratios (TER) that add to your total cost, and you can estimate the effect of those extra costs the same way.
Why is the lifetime cost higher than the total fees paid?
Because the fees you paid would have earned additional returns had they stayed invested. The gap between the gross and net ending values captures both the direct fees and the lost growth on those fees.
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Estimates only. Not investment advice.
Investment Disclaimer: Estimates only. Not investment advice.
This calculator provides estimates for educational purposes only and is not investment advice. Past performance does not guarantee future results. Consult with a qualified financial advisor before making investment decisions. All investments carry risk, including potential loss of principal.