Clear Money Guide
What this guide covers
A quick view of the questions and evidence developed below.
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Updated July 29, 2026. Quick answer: Over 20 years, on a $1,000,000 balance, a 1% annual fee costs $330,660 in fees paid — and $493,865 in ending balance. Those are different numbers, and the gap between them is the part nobody quotes: $163,205 of growth the fee was removed from before it could compound. Every page that answers this question quotes the first number. The second one is the actual cost.
The arithmetic, run out
The assumptions, so you can disagree with them. 6% gross annual return, a 1.00% advisory fee charged each year on the running balance, and 0.10% as the cost of holding a broad index fund yourself. Change any of the three and the numbers move — the point is the shape, which does not.
| Starting balance | Years | With a 1% advisor | Self-managed | Terminal gap | Fees actually paid |
|---|---|---|---|---|---|
| $250,000 | 10 | $407,224 | $443,506 | $36,282 | $31,445 |
| $250,000 | 20 | $663,324 | $786,791 | $123,466 | $82,665 |
| $250,000 | 30 | $1,080,486 | $1,395,786 | $315,300 | $166,097 |
| $1,000,000 | 10 | $1,628,895 | $1,774,024 | $145,130 | $125,779 |
| $1,000,000 | 20 | $2,653,298 | $3,147,163 | $493,865 | $330,660 |
| $1,000,000 | 30 | $4,321,942 | $5,583,144 | $1,261,201 | $664,388 |
Read the last two columns against each other. At every row the terminal gap exceeds the fees paid, and the excess widens with time: on $250,000 over ten years the difference is small, and on $1,000,000 over thirty years the gap is $1,261,201 against $664,388 paid — nearly $600,000 of pure foregone compounding. A fee is not a one-off charge subtracted from a balance. It is a permanent reduction in the base that everything afterwards grows from.
The break-even, which is the only number that decides anything
None of the above is an argument against hiring an advisor. It is the price tag, and a price tag is only half a decision. The other half: at a 1.00% fee against a 0.10% self-managed cost, an advisor has to add 0.90 percentage points a year, net of their own fee, every year, simply to draw level. Above that, they are worth it on the arithmetic alone. Below it, they have to be worth it for reasons that are not returns — and there are real ones.
What actually clears that bar, and what does not. Nobody reliably adds 0.90 points a year in security selection; that is not what the good ones sell. What can clear it is one-time and structural: the order you draw accounts down in, whether an inherited account gets emptied in a lump or spread, not tripping over a rule that costs a penalty, and not selling a concentrated position badly. Those are finite pieces of work. Which raises the question the pricing model answers rather than the advisor — whether you should be paying a percentage of assets for finite work at all.
Two things this table is not
It is not a claim about any firm’s fee schedule. Real schedules break at balance levels, and at $250,000 you are often at or under a firm’s asset minimum, where an annual minimum fee can make the effective rate higher than the headline percentage. And it is not a forecast — 6% is an input, not a prediction. Change it and every number moves; the shape does not.
If the inheritance is nearer $250,000 than $1,000,000, the answer changes for a reason that is not the fee.
Sources
Arithmetic computed for this page on the stated assumptions — 6% gross annual return, a 1.00% advisory fee charged annually on the running balance, and a 0.10% self-managed cost. These are inputs, not forecasts, and not a claim about any firm’s schedule. Fee-level context: our own AUM fee pages. Every tax rule referenced is linked to the page that carries it rather than restated here.
This is arithmetic and decision framing, not tax, legal or investment advice. Nothing here states a tax deadline or a filing requirement — where one matters, the link goes to the page that carries it. Your own answer turns on what the inheritance consists of and on facts no page can see.
Related
What firms actually disclose at this balance. In our own benchmark of published adviser fee schedules, the weighted median annual cost at $1,000,000 is $8,750 to $10,000, taken from the Form ADV Part 2A filings of 176 SEC-registered advisers. The full benchmark, with method.