A 0.25% fee on $100,000 over 30 years

Every dollar paid in annual advisory fees doesn’t just reduce your return by that dollar — it forfeits every future dollar that dollar would have compounded into. The table above shows the result: the drag column is not a flat fee × years. It’s the full compounded gap between two portfolios that started identically and diverged by the fee rate each year.

At 7% gross return, a 1% annual fee reduces your net return to 6%. That 1-point difference compounds for decades. On a large portfolio over 30 years, it can consume more than a quarter of your final wealth. The numbers scale with your starting balance because compounding does — the same percentage loss at $1M simply loses more in absolute dollars.

This is why index funds changed investing. A broad market ETF charging 0.04% versus a managed account at 1% isn’t a 0.96% annual difference — it’s the gap shown on this page. That gap represents real wealth that either stays in your portfolio or flows to the fee recipient. Over a working career, most investors would rank it among their largest financial decisions.

Run your own numbers with the calculator below. Change the growth rate assumption to see how fee drag interacts with returns — a lower expected return makes the percentage lost to fees even larger.