The True Calculated Cost of a Flat-Fee or Hourly Financial Advisor

Flat fees and hourly advice are paid in dollars, not as a percentage of your portfolio.

Because these fees do not scale with portfolio size, this fee structure is usually arithmetically less costly over time than percentage-of-assets (AUM) fee models.

Over long time horizons, the true cost still includes both the fees paid and the opportunity cost of no longer compounding those dollars.

This calculator estimates total fees, lost compounding, ending portfolio values, and the AUM-fee equivalent under identical return and contribution assumptions.

No opinions. No hidden assumptions. Just arithmetic.

Inputs

Starting balance ($)

Monthly contribution ($/mo)

Time horizon (years)

Expected annual return (%)

Expected annual return slider

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Fee model

Flat annual fee Hourly fee AUM fee (for comparison)

Flat and hourly fees are applied as dollars deducted over time. AUM fees are applied as a percentage of assets.

Flat fee per year ($)

Increase fee each year

Hourly rate ($/hr)

Hours per year

Increase fee each year

AUM fee (%/yr)

Calculated Results

Inspect the Arithmetic

Total calculated cost

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Fees paid + lost compounding

AUM-fee equivalent

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What AUM % produces the same ending value?

Ending value (with advisor fee model)

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Ending value (no advisor fees)

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Fees paid

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Lost compounding

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Calculated using monthly compounding and the assumptions shown above.

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Method & assumptions

Monthly compounding

Monthly compounding based on the annual return.

Contributions

Contributions occur monthly.

Fee deductions

Fees are deducted monthly (annual fee divided by 12; AUM fee applied monthly).

Lost compounding

Lost compounding is calculated as the future value of each fee deducted, compounded at the same assumed return to the end of the horizon.

Consistency with AUM calculator

When the same AUM percentage, return assumptions, and contribution schedule are used, this calculator produces the same numerical results as the AUM-based advisor cost calculator.

Scope note

Taxes, trading costs, and account-specific fees not included.

Disclaimer: All content on The Long Math — including articles, essays, calculators, tools, or any other material — is provided solely for educational and informational purposes and does not constitute financial, tax, legal, or investment advice. Any results or projections are based on simplified models, assumptions, and user-supplied inputs and may not reflect real-world outcomes. You are responsible for evaluating the accuracy and applicability of the information provided and for conducting your own due diligence. Before making financial decisions, consult a qualified professional.