Advisor Fee Impact Calculator

Advisor fee impact calculator for AUM fees and long-term investing

This advisor fee impact calculator estimates how much an ongoing financial advisor fee can reduce your ending portfolio value over time. The most common pricing model for ongoing advice is an annual assets-under-management (AUM) fee, expressed as a percentage of the account value. That fee may look small, but it repeats every year and compounds against you because money that leaves your account cannot keep growing.

The goal of this calculator is one decision: understand the long-term trade-off of paying an ongoing AUM fee on an investment portfolio, assuming the same underlying investment return. It is not judging whether advice is worth it. It is quantifying the drag so you can compare it to the value you believe you are receiving, such as planning, behavioral coaching, tax strategy, or product selection.

To use it, enter your starting portfolio balance, your expected annual return before fees, the advisor fee percentage, and your time horizon. If you regularly add money to your portfolio, open the Advanced section and enter an annual contribution amount. The calculator will show your projected ending balance with the advisor fee and a no-fee baseline using the same return assumptions. It also shows the estimated total fees paid and the difference in ending value, which is the practical cost of the fee under these assumptions.

What the outputs mean is straightforward. “Ending value (no advisor fee)” is the hypothetical result if you earned the stated return and did not pay an ongoing AUM fee. “Ending value (with advisor fee)” applies the fee each year, reducing the balance and therefore reducing future compounding. “Estimated total fees paid” adds up the year-by-year fee amounts. “Value lost to fees” is the gap between the two ending values and is usually larger than the total fees paid, because it includes the lost growth on fees that left the account earlier.

If you are comparing advisors or considering moving from an advised account to a self-directed account, the most useful number is often the percentage reduction in ending value. A small-looking annual fee can translate into a meaningful slice of the eventual outcome over long periods. This is particularly important when your time horizon is long and your investment return expectation is moderate to high, because compounding magnifies repeated costs.

This calculator intentionally stays focused on ongoing AUM fees. It does not try to handle every possible pricing model, every tax rule, or every portfolio complexity. If you want to model a one-time planning fee, hourly advice, commissions, or platform fees, that is a different decision and needs different assumptions. Here, the only question is: what happens if a percentage is removed from your assets every year?

Assumptions and how to use this calculator

• The advisor fee is treated as an annual percentage of assets (AUM) and is applied once per year as an estimate of what ongoing charges do over time.
• The investment return you enter is a constant annual return before fees and does not vary year to year.
• If you enter an annual contribution, it is added at the end of each year (after growth for that year) to keep the model simple and consistent.
• Fees are estimated using an average balance approach within each year, which approximates charging throughout the year without requiring quarterly inputs.
• This calculator ignores taxes, trading costs, inflation, account minimums, performance fees, and any additional platform or product expense ratios.

Common questions

Is “total fees paid” the same as “value lost to fees”?

No. Total fees paid is the sum of the fee amounts that are removed each year. Value lost to fees is usually higher because it includes the growth you would have earned on those fee amounts if they had stayed invested. Over long horizons, the gap between these two numbers can become meaningful.

What if my advisor charges quarterly, not annually?

Many AUM fees are billed quarterly. This calculator approximates that effect by estimating fees based on an average balance within each year. For most planning comparisons, the difference between annual and quarterly modeling is small relative to the broader uncertainty of future returns. If you need precision for a specific statement comparison, use the exact billing schedule from your account documents.

What should I enter for expected annual return?

Use a realistic long-run estimate for your portfolio before fees. If you are unsure, pick a conservative assumption rather than an optimistic one. The calculator is most useful when you test a small range (for example, a lower and higher return) and see whether your decision changes.

How do contributions affect the fee impact?

Contributions usually increase the fee impact because they increase the balance that is exposed to the ongoing percentage charge. If you contribute consistently, the fee cost can become a larger absolute amount over time, even if the percentage fee stays the same.

When does paying an advisor fee make sense?

This calculator does not answer that directly. It tells you the hurdle you are paying for. If the advisor’s guidance plausibly improves outcomes by more than the fee drag through better behavior, better planning, lower taxes, or avoiding costly mistakes, it may be worth it. If not, the fee drag is a clear headwind. Use the result as an input to that judgment, not as a universal rule.