Investment Fee Calculator
Final value and money lost under two fee levels, fees paid plus the compounding they forfeit, the share of your wealth consumed and the extra years of contributions the higher fee costs — any currency.
| Final value with no fees at all | — |
|---|---|
| Final value — option A | — |
| Final value — option B | — |
| Fees paid directly — A / B | — |
| Lost growth on those fees — A / B | — |
| Share of your potential wealth consumed — A / B | — |
| Equivalent return reduction | — |
| Years of extra work to make up the difference | — |
Gap every 5 years
In short
Fees are charged on the whole balance every year and the money taken stops compounding, so a 1.5% annual fee over 30 years consumes roughly 30% of the final pot and 2% around 40%. 50,000 plus 500 a month at 7% for 30 years ends at about 668,000 with 1.5% fees and a 3% entry load, versus 921,000 at 0.2% — a 253,000 gap.
Who this is for: Investors comparing funds, platforms or advisers on total annual cost.
Why a 1% fee costs far more than 1%
- A fee is charged on the whole balance every year, and the money taken stops compounding. Over 30 years a 1.5% annual fee can consume a third of the final pot; 2% can consume 40%.
- What to add up: fund expense ratio (OCF/TER), platform or custody fee, adviser fee, transaction costs inside the fund, and any entry/exit loads. "Only 0.75%" from each of three layers is 2.25%.
- Index vs active: most active funds fail to beat their index after fees over 10+ years; the fee gap is the most reliable predictor of relative outcome.
- Front-end loads (common on bank-sold funds in the Gulf and South Asia, 2–5%) take money before it is invested — enter them separately.
- The "years of extra work" line converts the gap into time: how much longer you would need to keep contributing to catch up.
See also: Retirement Savings Calculator, Compound Interest & Savings Growth Calculator.
Assumptions
- Monthly compounding at the gross return; fee = balance × annual fee ÷ 12 deducted each month; entry load deducted from each contribution.
- Lost growth = no-fee value − fee value − fees paid.
- Years of extra work = months of further contributions under option A's net return needed to reach option B's final value.
Worked example
No fees: about 965,000. Option A ends at about 668,000, option B at about 921,000 — a gap of roughly 253,000. Option A pays about 132,000 in fees directly and forgoes another 166,000 of growth on them, consuming 31% of the no-fee outcome; option B gives up under 5%. Reaching B's figure under A's fees would take about 5.3 more years of contributions.
Frequently asked questions
What is a reasonable investment fee?
Under 0.3% all-in for a passive portfolio on a cheap platform; 0.5–1% with an adviser; anything above 1.5% needs a very good reason.
Does the expense ratio include everything?
No — platform fees, adviser fees and trading costs are separate; add them to get the total annual cost.
Is a 1% adviser fee worth it?
It can be if the adviser prevents costly mistakes or handles complex tax, but on a 30-year horizon it typically costs a quarter of the final pot — judge the service against that number.
Why does the gap grow faster in later years?
Because the fee applies to a larger balance each year and the lost compounding accumulates; most of the damage happens in the last third of the period.
What is a good expense ratio?
Under 0.2% for broad index funds; 0.5–1% for specialised or active funds is average; above 1.5% is expensive.
Do fees matter if the fund outperforms?
Only if it keeps outperforming after fees for decades — few do; the fee is certain, the outperformance is not.
Related calculators
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