On a $300,000 portfolio, ten years of adviser fees typically run from about $31,500 to $61,500, depending on the firm’s revenue model.
| Tier | Advisory Fee | Wrap Program |
|---|
This calculator works for any of the three revenue models. The thing it can’t tell you is which model applies to the firm sitting across the table from you. That’s what AdviserReport is for.
Are they Fee-Only? Fee-Based? or Commission? Every SEC-registered RIA gets a letter grade based on the conflicts of interest disclosed in its Form ADV Part 1A. The grade maps loosely to the revenue model:
| Grade | Typical revenue model |
|---|---|
| A | Fee-Only: RIA |
| BCD | Fee-Based: RIA & BD |
| BD | Commission: BD (separate designation, not a grade) |
Each report shows the firm’s grade or designation plus the compensation methods it can use, pulled directly from Form ADV Part 1A Item 5E. For your specific firm: the revenue-model answer this calculator can’t give you.
Discover AdvisersThis calculator does one thing: it shows a defendable estimate of what an investor with a given portfolio size would pay over time under different adviser compensation models. It is illustrative, not a quote. Actual fees from any specific firm are disclosed in that firm’s Form ADV Part 2A — the “Firm Brochure” — which is publicly available on the Securities and Exchange Commission's (SEC) Investment Adviser Public Disclosure site.
Use the calculator to develop a feel for the orders of magnitude involved. The most informative interaction is to keep the portfolio size constant and toggle across the four scenarios — the differences you see are the cost of different revenue structures, isolated from everything else. Hovering a column lights up the slider segments that drive its math.
The calculator above is intentionally one-sided: it shows what you pay, not what you get. Evaluating an adviser's worth requires its own analysis. A good adviser—handling tax complexity, planning gaps, or behavioral biases—can deliver value that materially offsets their fee. But the qualifier good does heavy lifting here; adviser quality varies wildly.
Here, we break down industry claims, empirical evidence, and defensible facts. We then apply these components to the calculator’s default scenario, translating the cost-versus-value tension from abstract percentages into actual dollars.
Three asset manager publications dominate the "value of an adviser" literature:
Vanguard’s Advisor’s Alpha (2025) estimates that implementing their best practices adds about 3% in net returns through portfolio construction, behavioral coaching, tax strategies, and rebalancing.[9]
Russell Investments’ Value of an Advisor (2025) uses a similar four-pillar framework, estimating comparable value (around 3.5% based on their Canadian data).[10]
Morningstar’s Gamma (2013) is more conservative, estimating that optimizing retirement-income decisions adds 1.59% per year in certainty-equivalent income.[11]
A crucial caveat: each study is published by an asset manager that distributes products through financial advisers. They compare a "perfectly implemented framework" against worst-case unguided investor behavior. Both sides of the comparison are framed by parties with a structural interest in a high number. While not necessarily wrong, these headline figures require independent verification.
The industry's 3% claim rests heavily on the "behavior gap"—the idea that investors panic and mistime the market. Vanguard and Russell value this single factor at ~1.5% per year.
The classic source for this gap is DALBAR, which historically claimed a massive 4–6% annual penalty. However, independent researchers have long rejected DALBAR’s methodology. A more rigorous source, Morningstar’s Mind the Gap (2024), puts the penalty at a much lower 1.2%.[14]
Even that may be overstated. A 2024 academic paper (Fulkerson et al.) showed that Morningstar’s methodology contains timing biases that inflate the gap. After correcting Morningstar’s 2023 data, the actual behavioral penalty dropped to just 0.03% per year.[13]
The implication? The largest component of the industry's 3% claim is highly overstated. Those figures represent theoretical upper bounds, not average realities.
Furthermore, "average" is a dangerous assumption. Egan, Matvos, and Seru (2024) found that 1 in 15 US advisers has a record of serious misconduct.[12] Meanwhile, J.D. Power (2023) found only 11% of advisers deliver truly "comprehensive advice"—a fiduciary commitment, transparent fees, and holistic planning.[16] The remaining 89% deliver transactional or partially personalized service. Finding that 11% is the most critical decision a household makes.
Several components of advice can be rigorously quantified:
Tax-loss harvesting is the most defensible benefit. Chaudhuri et al. (2020) found systematic harvesting added 1.08% annually over a passive benchmark.[15] However, it only applies to taxable accounts (not IRAs/401ks), its value decays after years 1–5 as gains accumulate, and it requires high enough tax brackets to matter.
Asset location—placing tax-inefficient assets (bonds, high-turnover funds) in tax-deferred accounts and tax-efficient assets in taxable accounts—adds 10–50 basis points annually, depending on the portfolio mix and tax rates.
Withdrawal sequencing in retirement has immense value but resists annualization. Strategically drawing from different accounts and executing Roth conversions happens at major decision points (retirement, Medicare IRMAA, RMD onset), not as a recurring annual percentage.
Social Security optimization can net a married couple $50,000–$200,000+ over their lifetimes. This is a massive, one-time value creation event.
Behavioral coaching is real but episodic. In normal years, the value is near zero. In crisis years (like 2008 or 2020), preventing a panic-sell can save a portfolio. It is entirely dependent on the adviser actually stopping the mistake when it matters most.
To make this concrete, the table applies these ranges to the calculator’s default scenario: a $500,000 portfolio over a one-year horizon. The Year-1 cost row reproduces the calculator’s output. The deduction rows show what a good adviser could realistically offset.
Assumption: This models a couple with $200K in a taxable brokerage, $250K in tax-deferred accounts, and $50K in Roth. Households with proportionally more in tax-deferred accounts would see smaller tax-loss harvesting and asset-location benefits; households with more in taxable accounts would see larger ones.
| Fee-Only AUM |
Advisory A-Share |
Wrap Program |
A-Share Commission |
|
|---|---|---|---|---|
| Year-1 cost | $6,250 | $10,000 | $10,250 | $16,250 |
| Tax-loss harvesting1 applied to the $200K taxable sleeve | −$1,000 to −$2,000 | −$1,000 to −$2,000 | −$1,000 to −$2,000 | not delivered |
| Asset location & tax-aware rebalancing2 applied to the full $500K portfolio | −$500 to −$2,500 | −$500 to −$2,500 | partially bundled3 | not delivered |
| Comprehensive planning4 Roth conversions, Social Security, estate | situational | situational | situational | not delivered |
| Behavioral coaching5 | event-dependent | event-dependent | event-dependent | not delivered |
| Year-1 cost after defensible value-add | $1,750 to $4,750 | $5,500 to $8,500 | $5,750 to $8,750 | $16,250 |
1 Chaudhuri, Burnham, Lo (2020) modern-period range of 50–100 bps on the taxable sleeve.[15] Applied to the $200K taxable assumption.
2 Asset-location literature and Vanguard’s quantification modules: 10–50 bps on the total portfolio.[9]
3 Wrap programs typically include rebalancing in the bundled fee. The marginal value-add for tax-aware location is real but smaller than for unbundled advisory accounts—some of what would be a separate deduction is already inside the wrap fee.
4 Genuinely valuable but episodic—concentrated at decision points rather than annualized. Not material in most Year-1 estimates for an accumulation-phase couple.
5 Vanguard values this at ~150 bps; Fulkerson et al. (2024) show the underlying behavior gap is near zero after methodological corrections.[13] Honest characterization: zero in most years, potentially massive in specific crisis years if the adviser actually prevents a panic move.
Two major takeaways:
First, even in the best-case scenario, the quantifiable value does not fully cover the Year-1 cost. Advice is not free. The real case is more modest: a good adviser can offset a meaningful fraction of the fee, reducing the net cost to a level where the convenience and structure are worth paying for.
Second, the Commission column relies on product placement, not ongoing planning. If you want tax harvesting, asset location, and comprehensive planning, you won't generally find it in a pure commission structure.
Every defensible value claim above starts with "a good adviser." An adviser who charges Fee-Only rates but fails to actively tax-loss harvest, optimize asset location, or examine the viability of Roth conversions is charging for value they don't deliver. Conversely, a Wrap-fee adviser who rigorously executes some or all of these strategies may easily justify a potential higher all-in cost.
Compensation structure dictates conflicts of interest, but it doesn't guarantee competence. The fee question and the quality question are distinct. The calculator answers the first; AdviserReport exists to help answer the second, surfacing the publicly disclosed data needed to find that 11% of advisers whose incentives actually align with your interests.
The four columns do not share a single advisory fee schedule. Fee-Only AUM and Advisory A-Share use the same tier schedule: 1.00–1.25% (under $1M), 0.75–1.00% ($1M–$2M), and 0.50–0.85% (above $2M). This reflects typical Form ADV Part 2A disclosures from mid-sized RIAs and 2022–2025 industry surveys.
The decision to use one schedule for both columns is based on sampled brochure data (May 2026), which shows dual-registered advisory fees clustering at or slightly above pure Fee-Only RIA rates, not below. The hypothesis that bundled 12b-1 trails drive down headline advisory fees is simply not supported by published data. Thus, the calculator treats their advisory fees identically, capturing the cost difference entirely within the fund expense ratio.
The Wrap Program column uses a categorically higher schedule: 1.50–2.50% for portfolios under $1M. Wrap programs bundle advisory, execution, custody, and sometimes third-party manager fees into a single charge. Industry maximums cluster at 2.50%, with effective rates for sub-$1M accounts typically landing in the 1.50–2.25% band.
The A-Share Commission column charges no advisory fee. These accounts compensate the broker via upfront loads and ongoing 12b-1 trails bundled inside the fund expense ratio.
This range reflects the funds selected by fee-only advisers, who receive no third-party compensation dictating their fund choices. The low end (0.05%) represents broad-market index funds available directly to retail investors. The high end (0.50%) covers actively managed and factor-tilted strategies. For context, the Investment Company Institute reports the 2024 asset-weighted average expense ratio is 0.40% for equity mutual funds and 0.14% for index equity ETFs.
These three columns use different fund expense ranges because of which funds are chosen in each channel, not share-class mechanics. An A-share mutual fund carries the exact same gross expense ratio whether sold load-waived in an advisory wrap or with a front load in a commission account.
Advisory A-Share (0.50–1.10%, default 0.85%): Dual-registered advisory wraps curate menus featuring proprietary funds and revenue-sharing partners. The economic pressure favors funds paying distribution and servicing fees back to the broker-dealer, pushing expense ratios into the 0.75–1.00% range.
Wrap Program (0.05–0.40%, default 0.20%): Wrap programs typically use institutional (I-class) or clean shares with zero 12b-1 fees. The premise is that cheaper underlying funds offset the higher all-in wrap fee. Whether this actually saves the investor money depends entirely on the specific program's total fee and the client’s trading frequency.
A-Share Commission (0.50–1.10%, default 0.75%): Commission sales concentrate in fund families with established breakpoint schedules (e.g. American Funds, Franklin Templeton, MFS). Within these families, expense ratios vary by ~25–30 basis points. A typical multi-family portfolio covering major asset classes blends to roughly 0.70–0.85%.
Per SEC rules, a fund’s published gross expense ratio already includes its 12b-1 fee. The 0.25% trail compensating the broker on an A-share purchase is built into the 0.85% or 0.75% expense ratio you see on the calculator—it is not an extra cost layer on top. (Earlier versions of this calculator added the trail separately, which double-counted; this version corrects that).
What this means in practice: when you compare an A-share (0.85% ER) to an I-class (0.55% ER) of the same fund, that 0.30% gap is largely the 12b-1 trail. You pay this real money indirectly through reduced returns, even though it never appears as a line item on your statement.
Class A mutual funds deduct a one-time sales commission—the front-end load—from the investor’s initial purchase. This percentage declines at published breakpoints as the investment size grows.
This calculator models a typical 3–5 fund family portfolio covering major asset classes. Because FINRA Rights of Accumulation (ROA) aggregate purchases within each family, each family crosses its own breakpoint based only on the dollars invested in that specific family, not the total portfolio size:
The blended rate reflects these per-family tiers. For a $500K portfolio spread evenly across three families ($167K each), each family hits the 3.50% band. The schedule never reaches 0% because no single family holds the entire $1M+ portfolio.
Two scenarios alter this math. A consolidated single-family portfolio with a Letter of Intent (LOI) hits the aggregate breakpoint (e.g., $1M pays 0%). Conversely, a missed-breakpoint portfolio spread across 6–8 families without proper ROA application could pay 50–150 basis points more. Missed breakpoints remain a documented FINRA enforcement issue and a real risk this calculator does not model.
Between 2018 and 2020, the SEC returned over $139 million to investors through enforcement actions against 97 investment advisers. The pattern was consistent: dual-registered advisers placed clients in higher-cost share classes (paying 12b-1 fees back to the adviser) when lower-cost shares of the exact same funds were available to the client.
This nine-figure restitution highlights the exact structural conflict our Advisory A-Share column makes visible: load-waived A-shares retain the 12b-1 trail back to the dual-registered adviser, even when clean shares without the trail exist.
Wrap programs bundle advisory, execution, custody, and reporting into one fee. This benefits active traders, who pay one rate regardless of transaction volume. However, for long-term buy-and-hold investors, bundling often results in materially higher total costs than unbundled fee-for-service models.
In a July 2021 Risk Alert, the SEC flagged "reverse churning"—where clients in wrap programs with low trading activity pay higher total costs than they would in non-wrap accounts. The SEC also documented recurring disclosure failures regarding hidden transaction costs (sub-advisers “trading away” through external brokers) and conflicts of interest.
The Wrap Program column highlights this structural pressure: because adviser compensation doesn't change with trading volume, they have no incentive to economize on transactions. For buy-and-hold investors, the wrap fee becomes the dominant cost, and the “cheaper funds inside the wrapper” argument only works if the wrapper's premium justifies the services rendered.
This calculator computes costs on a point-in-time basis. It does not assume portfolio growth or model the compounding of foregone returns. Multi-year totals are simple sums: year one’s ongoing cost multiplied by the time horizon, plus any upfront costs.
This is a highly conservative approach. A model factoring in portfolio growth would calculate fees on a growing balance, producing significantly higher cumulative costs. We chose simple summation because it requires no assumptions about future market behavior and is entirely transparent to audit.
Three categories of cost are deliberately excluded from the calculator. None of them are zero; in many cases they materially affect the total cost of an advisory relationship.
If your adviser’s recommendations involve any of these categories, the relevant disclosures are in the product’s prospectus and in the firm’s Form ADV Part 2A. The questions worth asking, in either model: How are you compensated for recommending this specific product? What other share classes or alternatives were available, and why is this one being recommended?
It depends on what the fee buys. On a $300,000 portfolio, 1% is $3,000 a year, and over ten years the fees plus the growth they forgo add up to real money. Comprehensive planning, tax coordination, and behavioral coaching can justify that cost. Portfolio management alone rarely does. Run your own number in the calculator above, then weigh it against what the firm actually commits to in its Form ADV. See Why pay an adviser this much?
The names are one word apart; the economics are not. A fee-only adviser is paid only by you. A fee-based adviser is paid by you and can also earn commissions and product compensation, which stack on top of the stated advisory fee and often never appear in the headline rate. On the same portfolio, that extra layer is what separates the low and high ends of the range above. See Advisory fee ranges.
It depends on how you invest. A wrap fee bundles advice, trading, and custody into a single rate, which can favor an active trader. For a long-term, buy-and-hold investor who rarely trades, that bundle often costs more than paying for the pieces separately. The SEC has flagged wrap accounts where clients trade too little to justify the fee. See Wrap programs and the SEC’s 2021 Risk Alert.
Numbered references throughout this page link to the sources below.
[1] Kitces Research — How Financial Planners Actually Do Financial Planning (web article)
[2] Investment Adviser Association — 2025 Investment Adviser Industry Snapshot (PDF)
[3] Charles Schwab — 2024 RIA Benchmarking Study (PDF)
[4] Investment Company Institute — Trends in the Expenses and Fees of Funds, 2024 (PDF)
[5] Wrap fee program brochures: Morgan Stanley Smith Barney LLC, Raymond James & Associates, Benjamin F. Edwards (PDFs); UBS Wealth Management USA wrap fee schedules cited via AdvisorHub coverage of ADV maximums (web article)
[6] U.S. Securities and Exchange Commission, Division of Examinations — Observations from Examinations of Investment Advisers Managing Client Accounts that Participate in Wrap Fee Programs (Risk Alert, July 21, 2021) (PDF)
[7] Advisory A-Share tier-schedule samples: Choice Financial Planning (Commonwealth Financial Network adviser, Custom Portfolio program); StrategicPoint Investment Advisors Form ADV Part 2A; Edward Jones Advisory Solutions Fund Models Schedule of Fees (wrap-analog reference); brochure pull conducted May 2026
[8] Class A breakpoint schedules and expense ratio samples: American Funds (Capital Group) Share Class Pricing Details; Franklin Templeton fund prospectuses on SEC EDGAR (Franklin Custodian Funds, Franklin Income Fund); MFS Class A Share Pricing; per-fund Class A expense ratios sourced from FY2024–FY2025 SEC 497K filings (Growth Fund of America, AMCAP, Investment Company of America, Washington Mutual Investors, American Balanced, MFS Growth, Franklin Income); brochure pull conducted May 2026
[9] Vanguard — Vanguard Advisor’s Alpha: Celebrating 25 Years (2025 25th anniversary edition); Putting a Value on Your Value: Quantifying Vanguard Advisor’s Alpha (most recent quantification module update, 2024 with tax-loss harvesting added); accessible via advisors.vanguard.com/advisors-alpha
[10] Russell Investments — Your Value Is in the Numbers (2025 12th edition US Value of an Advisor Study) (PDF)
[11] Blanchett, David and Kaplan, Paul — Alpha, Beta, and Now… Gamma, Morningstar Investment Management working paper (PDF); published version: The Journal of Retirement, Fall 2013, 1 (2): 29–45
[12] Egan, Mark; Matvos, Gregor; and Seru, Amit — The Problem of Good Conduct Among Financial Advisers, Journal of Economic Perspectives 38(4), Fall 2024: 193–210; companion empirical work: The Market for Financial Adviser Misconduct, Journal of Political Economy 127(1), 2019: 233–295
[13] Fulkerson, Jon; Jordan, Bradford; Riley, Timothy; and Yan, Qing — Bad Timing Does Not Cost Investors One Fifth of Their Funds’ Returns: An Examination of Morningstar’s ‘Mind the Gap’ Study, SSRN working paper, July 2024
[14] Morningstar — Mind the Gap 2025: A Report on US Investor Returns (PDF), August 2025
[15] Chaudhuri, Shomesh; Burnham, Terence; and Lo, Andrew — An Empirical Evaluation of Tax-Loss-Harvesting Alpha, Financial Analysts Journal Q3 2020; MIT open-access preprint at dspace.mit.edu
[16] J.D. Power — 2023 US Full-Service Investor Satisfaction Study
AdviserReport is independent and unbiased. We do not sell leads, take referral fees, or accept payment from advisory firms for grades or inclusion. This free calculator exists as a tool for you to help inform your decision, not to route you to anyone.