Financial Advisor Value Calculator: Is It Worth the Fee?

This calculator compares two paths for the same money: investing on your own, or paying an advisor a fee and assuming the advisor adds some extra return each year. The idea comes from Vanguard’s “Advisor’s Alpha” framework, which says an advisor can add value by rebalancing, choosing tax-smart accounts and coaching you to stay invested when markets fall. The default of 2.5% a year is an illustrative gross figure from that framework, before fees. It is not a promise of what any advisor will earn, and you can change it.

With the default 0.95% fee, a 2.5% extra return leaves about 1.55% a year after fees. Treat that extra return as an assumption. Coaching and tax savings show up unevenly, mostly in rough markets and for people in higher tax brackets, so try lower numbers too. If the extra return is no higher than the fee, the advisor does not pay for itself.