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A percentage of your assets is never sent to you as a bill.
It is deducted quietly, every year, from the money you already have — including from the growth of the dollars it took last year. Physicians price “one percent” against their income and conclude it is small. It is not levied on income. Here is what it is levied on.
Cost over the horizon
$877,405
Over 30 years, a 1.00% fee on your assets leaves you with $3,807,618 instead of $4,685,023. You are never invoiced for the difference.
29
years of your own contributions, at $30,000 a year
19%
of the portfolio you would otherwise have ended with
$29,247
a year, on average, across the whole horizon
Nominal returns, compounded annually, with no market variance and no taxes. The comparison is fee versus no fee — it prices the fee only, and does not attempt to value anything the advisor provides in return.Real returns are never a straight line. This is a cost calculator, not investment advice, and not every advisor charges a percentage of your assets.
Why this number is hard to find
A percentage-of-assets fee is deducted inside the account rather than billed, so it never appears on a statement as a line item you approved. Firms disclose it in Form ADV Part 2 and in the advisory agreement — both public, both free to read. The number above is the same arithmetic, run forward.
A percentage of assets is a price that rises with your balance, whether or not the work does.
Attending Financial charges for software. We do not manage money, we take no commissions, and we accept no referral fees, so nothing above is a pitch for a product we sell — the calculator works whether or not you ever create an account.
Read the advisor-evaluation module →Fee translator
Price what you have been offered.
A percentage is not a price until you convert it. Enter the structure on the table and see it in dollars — this year, and at the balance you expect later — next to what the other structures would cost for the same service.
A percentage of everything managed, every year. Deducted from the accounts rather than invoiced, so it does not appear as a charge you approve.
Enter what you have been offered.
- Percentage of assets
- A percentage of everything managed, every year. Deducted from the accounts rather than invoiced, so it does not appear as a charge you approve.
- Flat annual fee
- A stated annual price, invoiced, independent of portfolio size. Does not move when your balance does.
- Hourly or project
- A rate per hour, or a fixed price for a defined piece of work. You pay for the hours you use.
- Commission
- The product manufacturer pays the advisor when you buy. Nothing is invoiced to you; the compensation is embedded in the product’s cost.
Figures are arithmetic on what you enter, in nominal dollars, with no taxes and no market variance. This prices a fee; it is not investment advice, and it takes no position on whether to hire anyone.
Frequently asked questions
What is an AUM fee?
AUM stands for assets under management. An AUM fee is charged as a percentage of everything you have invested — commonly 0.5% to 1.5% a year — rather than as a bill for hours worked or advice given. It is deducted directly from your accounts, so it never appears as a charge you approve, and it grows every year your portfolio grows, whether or not the work involved has changed.
Why does a 1% fee cost far more than 1%?
Because the fee is taken every year, and the dollars it removes would otherwise have compounded for the rest of your life. A 1% fee does not cost 1% of your portfolio — it costs 1% of this year’s balance, plus all the growth that 1% would have produced over the decades that follow. Compounded across a thirty-year career, a 1% fee typically consumes somewhere around a quarter of the final portfolio.
Is paying a financial advisor ever worth it?
Often, yes. Advice on a physician contract, a backdoor Roth with an existing pre-tax IRA, disability coverage, or an estate plan can easily be worth many times its price. The question is not whether advice has value — it is whether the price should scale with the size of a portfolio the advisor did not build. A flat-fee or hourly fiduciary charges for the work. A percentage-of-assets manager charges for the balance. Those are different products at very different prices.
How is this calculator different from the ones on advisor websites?
It runs entirely in your browser. Nothing you type is transmitted, stored, or attached to an account, and there is no form to fill in to see the result. Attending Financial is free for physicians and does not manage money, take commissions, or accept referral fees — so there is no version of this number that is better for us than the true one.
What assumptions does the calculation make?
It compounds a fixed nominal return annually, treats the fee as a reduction to that return, and adds your annual contribution at each year end. It ignores taxes, inflation, and market variance — real returns are never a straight line. The comparison is against a broad index fund’s expense ratio of 0.05%, not against zero, because self-directed investing is not free either.