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What a 1% Advisor Fee Costs You
One percent a year sounds small. It is charged on everything you own, every year, whether the market goes up or down, and it compounds against you. Put in your numbers and see the dollar figure.
Advisor Fee Calculator
What a percentage fee takes from your pile over time.
| Portfolio | 1% advisory fee, per year | The Tide Traders Model |
|---|---|---|
| $250,000 | $2,500 | Free while in beta |
| $500,000 | $5,000 | Free while in beta |
| $1,000,000 | $10,000 | Free while in beta |
Why 1% is bigger than it sounds
An advisory fee is quoted as a percentage of your assets, not of your gains. On a $500,000 portfolio, 1% is $5,000 this year. Next year the portfolio is bigger, so the fee is bigger too. And every dollar paid out is a dollar that stops compounding, which is why the true cost over 25 years is far more than 25 times the first year’s bill.
Try it above: $500,000 today, $12,000 added a year, 7% before fees, 1% fee, 25 years. The fee plus the growth it would have earned comes to well over half a million dollars, roughly a fifth of what you would otherwise have ended with.
What you are actually paying for
Be fair to advisors. A good one does planning, tax work, estate coordination and, most of all, keeps clients from selling at the bottom. If you value those, the fee can be worth it. But the fund selection and risk control part of the job, deciding what to own and when to step back, is the part that rules can do. That is the only part this page compares.
- Ask what the fee covers. If the answer is mostly a model portfolio of funds, you are paying 1% for something a set of published rules can do.
- Know the alternatives. A robo-advisor charges around a quarter of a percent. A target-date index fund charges a fraction of that. The Tide Traders Model publishes its rules and is free while in beta.
- Keep the risk control. The reason most people hire an advisor is to avoid doing something stupid in a selloff. A rule that steps back when volatility spikes does that job without a phone call.
Want the long version? Read how the model works and the Ultimate Guide to Index Funds.
For educational estimates only. Hypothetical returns are not guaranteed. Nothing here is personalised advice; the comparison covers investment management fees only.