How Much Are Investment Fees Really Costing You?
A 0.50% difference in advisory fees may seem small. Over 25 years, it can mean hundreds of thousands of dollars less in your retirement account. Use this calculator to see the real impact.
Your Scenario
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Portfolio Growth Over Time
Fee-Only Advisor
Why Fees Matter More Than You Think
Most investors focus on picking the right stocks or timing the market. But research consistently shows that one of the most reliable predictors of long-term investment success is something entirely within your control: the fees you pay.
Advisory fees are typically charged as a percentage of assets under management, deducted quarterly. Because they reduce your investable balance each period, the effect compounds over time. A fee that seems modest in year one quietly consumes a growing share of your wealth over decades.
This is not a hypothetical concern. Vanguard’s research estimates that a 1% difference in fees can reduce a portfolio’s ending value by roughly 25% over a 30-year period. The money lost to excess fees is money that can never compound on your behalf again.
Fee-Only Fiduciary Advisors
Fee-only advisors are compensated solely by the fees their clients pay, typically as a percentage of assets managed. They do not receive commissions, referral fees, or revenue-sharing from product companies. This structure removes the financial incentive to recommend one product over another, aligning the advisor’s interests directly with yours. Fee-only fiduciaries are legally required to act in your best interest at all times.
Commission-Based Advisors
Commission-based advisors earn income from the financial products they sell. While many are ethical professionals, the compensation model creates inherent conflicts of interest. Two products may serve you equally well, but one pays the advisor a higher commission. The “suitability” standard these advisors follow is less rigorous than the fiduciary standard, requiring only that a recommendation be appropriate rather than optimal.
See How a Fee-Only Approach Could Work for You
Davies Wealth Management is a fee-only fiduciary advisor serving clients in Stuart, Florida and nationwide. Schedule a complimentary consultation to review your current fee structure.
This calculator is for educational purposes only and does not constitute investment advice. Actual investment returns will vary and are not guaranteed. Past performance does not predict future results. The projections shown assume a constant rate of return and do not account for taxes, inflation, or market volatility. Davies Wealth Management is a fee-only fiduciary registered investment advisor. Always consult a qualified financial professional before making investment decisions.
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