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**Note: This calculator is a tool designed to provide a general estimate of the potential costs and benefits of working with a financial advisor based on the inputs you provide. The results generated by this calculator are approximations and should not be relied upon as the sole basis for making financial decisions. Advisor fees can change based on services and portfolio size. The value an advisor adds depends on your situation and goals. Some advisors lower fees for bigger portfolios or offer different fee types. The calculator uses a flat fee, which might not match real costs .The calculator assumes steady returns, but markets can be unpredictable. Advisors cannot guarantee better performance. Your actual results may differ.
Quick Answers
What are AUM fees?
An assets‑under‑management (AUM) fee is the annual percentage a financial advisor charges to manage your investments. The fee is calculated by multiplying your portfolio size by the advisor’s percentage and is usually deducted each year. Understanding this cost helps you see how fees affect your long‑term returns.”
Are AUM fees negotiable?
Yes. Advisor fees are not fixed. Many advisors will adjust their rate based on your portfolio size, services provided and other factors. Ask your advisor what is included in the fee and whether it can change as your investments grow.
What is a typical AUM fee range?
Most advisors charge between 0.5 % and 1.5 % of the assets they manage. Fees above this range usually include additional services such as tax planning, estate coordination or personal financial coaching.
Is working with a financial advisor worth the fees?
Research suggests that professional advice can add roughly 3 % in net returns through better asset allocation, rebalancing and tax management. Advisors also take the complexity out of investing and provide peace of mind by keeping your financial plan on track.
How do I calculate AUM fees?
Multiply your portfolio size by the advisor’s annual fee rate. For example, a $500,000 portfolio with a 1 % fee costs $5,000 per year. Over time, fees compound because they are deducted as your investments grow. Use the calculator below to project total costs and potential growth.
Are financial advisor fees tax deductible?
- No, advisor fees are not deductible for most taxpayers.
- The 2017 tax law eliminated deductions for investment-advice fees.
- Legislation has extended that prohibition beyond 2025.
- Business expenses and certain retirement-account fees may be handled differently; ask a tax professional.
Most individuals can’t deduct investment-advice fees on federal taxes. The Tax Cuts and Jobs Act suspended the miscellaneous itemized deduction for investment-related expenses from 2018 through 2025 (Source: Schwab). Recent legislation has extended that suspension, so financial planning fees remain non-deductible. Exceptions may apply for business investors or when fees are paid directly from certain retirement accounts; consult a tax professional for your situation.
How the AUM Fee Calculator Works
- Set Portfolio Size: Enter the current value of your investments.
- Choose an AUM Fee: Input the annual percentage charged by your advisor. Common fees range from 0.5 % to 1.5 %.
- Define Time Horizon: Select how many years you plan to keep your investments under management.
- Calculate: The calculator multiplies your portfolio value by the fee rate each year and projects both fees and growth over the chosen period. It assumes a steady market growth rate to show how your portfolio may evolve after fees.
The results include:
- Annual Fee: The amount you’ll pay each year based on your current portfolio size.
- Total Fee: The cumulative cost over your entire investment period.
- Estimated Portfolio Value: A projection of your portfolio’s future value, factoring in market growth and fees.
- Chart: A line chart showing the difference between your portfolio’s potential growth with and without AUM fees.
The AUM Fee Calculator is designed to give you a general understanding of how much you’ll pay in management fees over time, based on your portfolio size, the percentage fee charged by your advisor, and the length of your investment horizon.
Disclaimer: This calculator offers a general estimate. Actual advisor fees and investment returns may vary. Advisors cannot guarantee better performance. Do not rely solely on these estimates when making financial decisions.
The Value of Working with a Financial Advisor
When you are managing significant sums, professional guidance can help improve your long‑term results. Studies indicate that advisors can add about 3% in net returns through services like asset allocation, rebalancing and tax management. An advisor may:
- Craft a personalized investment strategy based on your goals.
- Adjust your portfolio as markets change.
- Coordinate with tax and estate professionals to optimize overall wealth.
- Provide peace of mind by handling complex financial decisions.
If you decide an advisor is right for you, review their credentials on FINRA’s BrokerCheck and the SEC’s Investment Adviser Public Disclosure (IAPD) sites. Also explore our resources on choosing an advisor and effective communication for more guidance.
