Robo-Advisor Fee Drag CalculatorFree online financial calculator — instant results, no sign-up
Estimate ending wealth lost to an annual advisory fee deducted from gross return.
Estimates only, based on the inputs and assumptions shown. This is not financial, investment, tax, or legal advice. Prices, rates and local rules may change; crypto scenarios do not predict returns. Confirm important decisions with a qualified professional.
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About the Robo-Advisor Fee Drag Calculator
The Robo-Advisor Fee Drag Calculator estimates how much ending portfolio wealth is lost when an annual advisory fee is subtracted from the gross annual return. It compares compound growth with and without that fee over your chosen holding period, showing the fee’s cumulative effect in dollars.
- Starting portfolio ($)
- The initial amount invested in dollars, with a default of $100,000.
- Gross annual return (%)
- The assumed annual investment return before the advisory fee, entered as a percentage and defaulting to 6%.
- Annual advisory fee (%)
- The annual advisory fee subtracted from the gross return, entered as a percentage and defaulting to 0.25%.
- Holding period (years)
- The length of time the starting portfolio remains invested, measured in years and defaulting to 25 years.
Formula and method
W₀ = P × (1 + r/100)^n; W_f = P × (1 + (r − f)/100)^n; D = W₀ − W_f.
- PStarting portfolio value in dollars.
- rGross annual return entered as a percentage, such as 6 for 6%.
- fAnnual advisory fee entered as a percentage, such as 0.25 for 0.25%.
- nHolding period in years.
- W₀Ending portfolio value without the annual advisory fee, in dollars.
- W_fEnding portfolio value with the annual advisory fee, in dollars.
- DFee drag at the horizon: the difference between the two ending portfolio values, in dollars.
Convert the percentage inputs to decimal rates and compound the starting portfolio over the holding period twice: once at the gross return and once at the gross return minus the advisory fee. Subtract the fee-adjusted ending value from the no-fee ending value, retaining precision during calculation and displaying dollar outputs to two decimal places. With the default inputs, the adjusted annual return is 6% − 0.25% = 5.75%. Without annual fee = $429,187.07; With annual fee = $404,584.65; Fee drag at horizon = $24,602.42.
Worked example
These are the calculator's starting values and the results it actually produces for them.
Inputs
- Starting portfolio100000 $
- Gross annual return6 %
- Annual advisory fee0.25 %
- Holding period25 years
Results
- Without annual fee$429,187.07
- With annual fee$404,584.65
- Fee drag at horizon$24,602.42
How to use the Robo-Advisor Fee Drag Calculator
- 1Enter your starting portfolio value in dollars.
- 2Enter the gross annual return you want to assume, before the advisory fee.
- 3Enter the annual advisory fee as a percentage; use 0.25 for a 0.25% fee.
- 4Enter the holding period in years.
- 5Review the two ending values and their difference, then change the fee or holding period to compare scenarios.
Reading your result
“Without annual fee” shows the projected ending wealth if the starting portfolio compounds at the gross annual return: $429,187.07 with the default inputs. “With annual fee” shows projected ending wealth after subtracting the advisory fee from that return each year: $404,584.65. “Fee drag at horizon” is the resulting reduction in ending wealth: $24,602.42. This gap includes both the modeled fee impact and the growth forgone on money no longer invested; it is not simply a total of advisory-fee payments.
Limitations
This is a simplified projection, not a forecast or investment recommendation. It assumes constant annual returns and fees, annual compounding, and no contributions or withdrawals. The fee is modeled by subtracting its percentage rate from the gross return, rather than simulating actual monthly or quarterly deductions from account assets. Taxes, inflation, trading costs, fund expenses, and other charges are not separately modeled. Actual robo-advisor fees may vary with account balance, use tiers or flat charges, or apply to only part of the portfolio. The comparison isolates fee drag and does not value services such as rebalancing, planning, or tax-loss harvesting.
Common questions
Does a 0.25% advisory fee reduce a 6% gross return to 5.75%?+
Yes. This calculator subtracts the fee in percentage points: 6% − 0.25% = 5.75%. It does not reduce the gross return by 0.25% of the return itself.
Is the $24,602.42 default fee drag the total paid to the robo-advisor?+
No. It is the difference in ending wealth after 25 years. It includes the modeled fee deductions and the compound growth those deducted amounts would otherwise have earned.
Does this calculator reproduce a robo-advisor’s quarterly billing?+
No. It uses an annual fee-adjusted growth rate. Quarterly billing based on account values can produce a different result, especially when returns fluctuate during the year.
Does the no-fee comparison mean that avoiding a robo-advisor will produce the higher ending value?+
No. Both scenarios assume the same gross return and differ only in the advisory fee. The calculator does not estimate whether the advisor’s services change investment performance, taxes, or investor behavior.
Does the calculator save my information?+
Calculations run in your browser. While signed in, inputs and results are automatically recorded in account history; saving a result creates a separate saved record.
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Results are estimates for informational purposes and are not financial, medical or legal advice.