Financial Advisor AUM Fee Calculator
Estimate the long-term cost of percentage-based financial advisor fees, including direct fees and the investment growth those fees could have earned. Compare projected portfolio growth with and without an annual AUM fee.
Enter Your Details
Current invested assets
Amount added per year (start of year)
Pre-fee gross return assumption
Annual fee as % of assets (0–10%)
1–100 years
See the Long-Term Fee Impact
Enter your portfolio assumptions to compare projected growth with and without an annual AUM fee.
Without Fee
With Fee
What an AUM Fee Is
An AUM (Assets Under Management) fee is a recurring advisory charge calculated as a percentage of the total portfolio value your advisor manages for you. If your portfolio is worth $200,000 and your advisor charges 1% per year, you pay approximately $2,000 in fees during that year — though the actual amount adjusts as your portfolio grows or shrinks.
AUM fees are the most common pricing model used by traditional investment advisors. They differ from flat retainer fees (a fixed annual or monthly dollar amount) and hourly or project-based fees. This calculator is specifically designed for percentage-based AUM arrangements.
Fee Drag: Why the True Cost Is Larger Than It Appears
The direct annual fee is only part of the picture. Because the fee reduces your ending balance each year, the following year starts with a smaller base — meaning less capital earns returns. This reduced compounding base is then again subject to the fee the next year, and so on. This cascading effect is called fee drag.
Over longer time horizons, the total cost of fee drag — the direct fees paid plus the growth those dollars would have generated had they stayed invested — can significantly exceed a simple multiplication of the annual fee by the number of years. The AUM fee calculator models both the direct fees and this compounded opportunity cost, so you can see the full projected impact.
This is a simplified model
The calculator models only AUM percentage fees. It does not include fund expense ratios, trading commissions, flat retainer fees, performance fees, platform costs, taxes, inflation, or other advisory arrangements. The projected values are estimates based on the constant-rate inputs you provide.
How the Calculation Works
The calculator runs an annual simulation for two parallel scenarios — one with the AUM fee, one without. For each year, the following sequence is applied:
# Applied to both no-fee and with-fee scenarios:
balance += annualContribution
balance = balance × (1 + returnRate)
# With-fee scenario only:
annualFee = balance × aumFeeRate
balance -= annualFee
- Annual contribution is added at the start of each year
- The full annual return is applied to the year-start balance
- The AUM fee is charged on the ending balance — the typical AUM billing convention
- Both scenarios run independently, allowing a direct comparison
Hypothetical Example
The following is a hypothetical illustration only. A 1% AUM fee is used here as an example input to illustrate how percentage-based fees compound over time — it is not presented as a standard, recommended, or typical advisory fee. Suppose you have a $100,000 portfolio, contribute $6,000 per year, use a 7% hypothetical annual return, with a 1% annual AUM fee over 20 years:
Starting Portfolio
$100,000
Annual Contribution
$6,000
Annual Return (hypothetical)
7%
AUM Fee (example)
1% / yr
Under these hypothetical inputs, the total projected cost — direct fees plus growth drag — can reach $60,000–$100,000or more over 20 years, depending on return assumptions. This is because each year's fee reduces the base that earns returns in all future years. Enter your own numbers in the calculator above to model your specific scenario.
How Contributions and Expected Return Affect the Projection
Larger annual contributions grow the portfolio faster, which also increases the dollar amount charged by a percentage-based AUM fee each year. Higher assumed returns amplify both the growth scenario and the fee drag scenario — because a higher return rate means the foregone compounding from fee drag is also larger.
Adjusting the expected return input lets you explore how different market conditions change the relative cost of the fee. Keep in mind that any rate entered is a hypothetical assumption — actual investment performance can vary significantly and is not guaranteed.
Common Questions
What is an AUM fee?
An AUM (Assets Under Management) fee is a recurring advisory charge calculated as a percentage of the total value of the assets your advisor manages. It adjusts automatically as your portfolio value changes — rising when your portfolio grows and falling when it shrinks.
What is 'fee drag'?
Fee drag is the compounding cost of advisory fees over time. When an annual fee reduces your balance, the following year starts with a smaller portfolio — which earns a lower return in absolute terms. That lower return is again reduced by the next fee, and so on. The cumulative loss becomes much larger than the simple sum of annual fee payments over the period.
Is a financial advisor worth the fee?
This calculator only models the mathematical impact of AUM fees. Advisors may provide meaningful value through financial planning, tax optimization, behavioral coaching, estate planning, and other services that are not captured here. Whether the value justifies the cost depends on your specific situation and the services provided.
What does this calculator not include?
This model excludes fund expense ratios, trading commissions, flat retainer fees, performance fees, tax implications, inflation, and advisory arrangements priced on a flat or hourly basis. Results reflect only the impact of the AUM percentage fee on portfolio growth under the constant-rate assumptions entered.