On a hypothetical $1,000,000 growing 6% a year for 20 years, a 1% annual fee adds up to $348,285 in fees, plus $235,712 in growth those fees would have earned. The SEC notes you lose "any return you would have earned on that fee" (SEC Investor Bulletin, How Fees and Expenses Affect Your Investment Portfolio, February 2014).
Run your numbers
Method: each year the balance grows at your assumed rate, the fee is charged on that year-end balance, then any withdrawal comes out. The no-fee path is identical without the fee. "Growth those fees would have earned" is the no-fee ending balance minus the with-fee ending balance, minus the fees themselves. Hypothetical; real returns vary and fees may be billed quarterly.
How to use the calculator
Enter five numbers. The calculator runs two paths side by side, one with the fee and one without, and shows the difference.
- Starting balance: the amount the fee is charged on today, or the amount you first gave the advisor.
- Annual fee %: your advisory fee as a yearly percentage. If your firm uses tiers, enter your blended rate.
- Years: how long you have paid, or expect to pay, the fee.
- Assumed growth %: a yearly return before the fee. This is an assumption, not a forecast. Try more than one.
- Annual withdrawal (optional): the dollars you take out each year for spending.
To look backward ("how much have I paid?"), use your starting balance and the years you have been a client. To look forward, use today's balance.
How the math works
The calculator uses one simple, stated method. Each year: balance = balance x (1 + growth); fee = balance x fee %; balance = balance - fee - withdrawal. The no-fee path is identical without the fee, and lost growth = (no-fee ending balance - fee ending balance) - total fees.
In plain words: the account grows for the year, the fee is taken as a percentage of that year-end balance, and then any withdrawal comes out. The same steps repeat every year, so the fee compounds: next year's growth is on a smaller balance.
Lost growth is the part most people miss. The SEC explains that with an ongoing fee, "not only is your investment balance reduced by the fee, but you also lose any return you would have earned on that fee" (SEC Investor Bulletin, How Fees and Expenses Affect Your Investment Portfolio, SEC Pub. No. 164, February 2014). The calculator shows that amount as its own line.
Real firms usually bill quarterly, often on the balance at the start or end of each quarter. Yearly billing on the year-end balance is a close, simple stand-in, and it is stated so you can check it by hand.
How to find your real fee
Use the fee you actually pay, not a rule of thumb. Three places show it.
- Form ADV Part 2A, Item 5. Every registered firm's brochure must give its fee schedule, say whether fees are negotiable, say whether fees are deducted or billed, and describe other costs such as custodian fees and fund expenses (SEC, Form ADV Part 2 instructions, Item 5, checked October 14, 2026). Look up the brochure on the SEC Investment Adviser Public Disclosure site.
- Form CRS. The short relationship summary (two pages for most firms, up to four for firms that are both brokers and advisers) must describe the main fees and the conflicts they create (SEC, Form CRS Instructions, checked October 14, 2026). Search it at Investor.gov/CRS.
- Your statements. Look for a line labeled advisory fee or management fee. Add up a full year of them.
The advisory fee is often not the whole cost. An industry survey found a median of 0.50% a year in underlying fund expenses on top of the advisory fee (Kitces.com, July 31, 2017). To include those, add them to the fee percentage you enter. For a broker or a firm that also sells products, check the record on FINRA BrokerCheck.
Limits of this estimate
This is a hypothetical estimate, not a statement of what you paid. It assumes a steady return every year, while real returns vary. It ignores taxes, trading costs and timing of deposits. It does not know your firm's tiers or billing dates.
It also cannot measure the value you received. A good advisor may have kept you invested in a bad year or saved you tax. Those benefits are real and do not show up here. Use the number to start a conversation, then ask your advisor for the actual dollar total. For the context, see what a 1% fee can quietly discourage.
Three examples with numbers
Hypothetical, using the method above with no withdrawals, a 6% assumed growth rate and no fund expenses. Each row is computed year by year.
| Scenario | Total fees paid | Lost growth on those fees | Ending balance with fee | Ending balance, no fee |
|---|---|---|---|---|
| $500,000, 1%, 15 years | $113,851 | $53,838 | $1,030,590 | $1,198,279 |
| $1,000,000, 1%, 20 years | $348,285 | $235,712 | $2,623,138 | $3,207,135 |
| $2,000,000, 0.75%, 20 years | $537,285 | $359,292 | $5,517,694 | $6,414,271 |
Check the middle row by hand. Year one: $1,000,000 x 1.06 = $1,060,000; fee = $1,060,000 x 1% = $10,600; balance = $1,049,400. After 20 years: $1,000,000 x (1.06 x 0.99) to the 20th power = $2,623,138. No fee: $1,000,000 x 1.06 to the 20th power = $3,207,135. The gap is $583,997, of which $348,285 is fees and $235,712 is lost growth.
These rows are illustrations, not forecasts. Your result depends on your real fee, returns and withdrawals.
Red flags
- A fee quoted only as a percentage, never as dollars for your balance.
- No fee line you can find on your statements.
- Fund expenses left out when you ask what you pay in total.
- "Everyone charges 1%" offered instead of your own fee in dollars.
- A blended rate nobody will calculate for you.
- Fees charged in advance with no clear refund terms if you leave mid-quarter.
- A fee schedule in the brochure that differs from what your agreement says.
- Reluctance to give a lifetime total of fees paid since you became a client.
Questions to ask before you sign
- How much have I paid you in total since I became a client, in dollars?
- What was my total fee last year, including fund expenses?
- What is my blended fee rate at my current balance?
- Do you bill in advance or in arrears, and on which balance?
- Are your fees negotiable, and are there breakpoints at higher balances?
- If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?
- Which services does the fee cover: tax planning, Social Security, Medicare, estate coordination?
- Where on my statement can I see each fee charged?
Read This Before You Sign
A one-page checklist: the red flags in annuity and indexed universal life (IUL) sales, and the questions to ask before you sign anything. How to find your real advisory fee, turn it into dollars, and ask for your lifetime total. We’ll email it to you.
The Retirement Literacy Foundation is a 501(c)(3) public charity (EIN 41-5062266). General education, not tax, legal or investment advice. Nothing is sold here. Unsubscribe any time.
Sources
- SEC Office of Investor Education and Advocacy: Investor Bulletin, How Fees and Expenses Affect Your Investment Portfolio, SEC Pub. No. 164 (February 2014)
- SEC: Form ADV Part 2 instructions, Item 5 Fees and Compensation (checked October 14, 2026)
- SEC: Form CRS instructions (checked October 14, 2026)
- Kitces.com: Independent Financial Advisor Fees Comparison, Typical AUM Wealth Management Fee (July 31, 2017)
- Investor.gov: Investment Advisers (checked October 14, 2026)
- SEC: Investment Adviser Public Disclosure search (checked October 14, 2026)
- Investor.gov: Form CRS search (checked October 14, 2026)
- FINRA: BrokerCheck (checked October 14, 2026)
The Retirement Literacy Foundation is a 501(c)(3) public charity. This page is general education, not tax, legal or investment advice. Nothing is sold here, no product is recommended, and RLF accepts no funding from financial companies. Rules and figures change; each one above shows its source and date. Check anything you plan to act on with your state insurance department or a qualified professional who is not paid on the product.