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Thread: How much is your financial advisor costing you?
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Old 07-01-2025, 08:16 AM
retiredguy123 retiredguy123 is online now
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Originally Posted by kingofbeer View Post
I never heard of an investor look at the tax part of the AUM fee. For example, if you have $1 million and the fee is 1%. Your fee is $10,000. However one would expect your return on your account to exceed 1%. 5 to 7 % would be a reasonable return. At 5%, your gains would be $50,000. 50,000-10,000 = 40,000. Your net gain after fees is $40,000.
The problem is that research has shown that most financial advisors cannot outperform the total return of the S&P 500 index. You can buy an S&P 500 index mutual fund or ETF for almost nothing and avoid the 1 percent AUM fee altogether.
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