Investment Fee Impact Calculator
Discover the true long-term cost of investment management fees
Is Your Adviser Worth These Fees?
Learn how to objectively evaluate your investment advisor's value and discover the institutional approach to efficient investment management.
Schedule a ConversationWhat a 1% Fee Actually Costs
The arithmetic is straightforward. A $1,000,000 portfolio earning 7% annually grows to $3,869,684 over 20 years with no advisory fee. The same portfolio, with a 1% annual AUM fee deducted each year, grows to $3,207,135. The difference is $662,549.
That $662,549 does not represent bad investment performance. It represents the compounding cost of a fee structure the wealth management industry has normalized for decades. The fee is assessed on your total assets every year, in good markets and bad, regardless of whether your advisor adds measurable value.
The standard 1% AUM fee is not the ceiling. Many advisors charge 1.25% or 1.5%, particularly on portfolios under $2 million. At 1.5%, the 20-year cost on a $1,000,000 portfolio at 7% grows to over $900,000 in foregone wealth.
Most investors have never seen this number. The fee appears as a small quarterly deduction, easy to overlook. Compounding makes it anything but small.
The calculator above uses your specific inputs, portfolio value, fee percentage, time horizon, and expected return, to produce your number. The default inputs reflect the most common scenario: $1,000,000, 1% fee, 20 years, 7% return. Change any input and the result updates instantly.
Understanding the cost is the first step. The second is deciding whether what you receive in return justifies it.