1% of $500,000 is $5,000 a year. Say it buys you ten hours... do the division.
$500 an hour.
That's not how the fee is written. A percent-of-assets fee is a balance times a number. Hours never enter the equation. The balance grows, the fee grows, and whether the work grew with it is a separate question the math doesn't ask.
The target is the structure, not the person. It hides its own unit price. So I made the calculator do the division.
What The Percent Hides
The 1% isn't an exotic number. A 2020 study, published by Kitces in 2021, put the median advisory fee at 1.0% of assets up to $1 million, and about 0.9% at $2 million and 0.8% at $5 million. NerdWallet says "the industry average is around 1% of your asset balance per year."
A 2017 survey of nearly 1,000 advisors, as reported by Kitces, put the all-in cost at about 1.65%. That's the advisory fee plus fund and other costs stacked together. Old data, 2017, so read it as a shape and not a today number.
The alternatives exist and they price the work directly. In that same 2020 study the median hourly rate was $250, with $150 and $350 as the 10th and 90th percentiles. A standalone plan came in at a median of $2,500 and a retainer at $4,000 a year. The 2022 Kitces report had the typical hourly rate at $250, with half the responses between $223 and $300, and the median standalone plan at $3,000.
Different units. One is a percent of everything you've built. The other is dollars for hours.
Put Your Number In
Ten hours is an input. You supply it. It's not typical, it's not average, and I'm not claiming anyone gets it. If you get four hours, the same $5,000 is $1,250 an hour. If you get twenty, it's a different number. Count the meetings and the deliverables you actually got and use that.
For a bracket, one more dated number: a 2022 Kitces survey put median team time at about 21 hours a year per ongoing client. That's the firm's time, team time, not hours you receive. Don't use it as your hours. It just shows the number isn't zero and isn't a mystery.
Put in your own balance, the fee on your statement, and an honest count of the hours you get. The first number it shows is the hourly rate. To reproduce the numbers below, set years to 10 and fund fee to 0. The full inputs are right after.
Here's the full tuple behind every number below: $500,000, nothing added, 10 years, 7% a year before fees, no fund fee, 1% advisor fee, 10 hours of advice; planner at $300 an hour for 3 hours a year. Type only $500,000 and you'll get something different. The form opens at 30 years and a 0.05% fund fee, so set the 10 and the 0.
Ten Years, Same Money
On that tuple the advisor-fee route ends at $909,698.37. Pay the planner $900 a year instead and you end at $992,260.56. The hourly route finishes $82,562.19 higher.
Same $500,000. Same 7% before fees. Same ten years. The only thing that changed is whether the cost scales with the balance or sits flat.
The calculator matches the Fee Drag calculator bit-for-bit when the planner is free.
Either way... that $82,562.19 is a result of the inputs. Change the planner's rate or hours, the years, the return, and it moves. That's the point of the tool. Go break it: run the advisor fee calculator with your real balance.
When The Paid Option Is Actually Worth It
Here's where the math can swing, and I'd rather show it than hide it.
Behavioral coaching is the usual argument for the percentage. Vanguard's 2015 research, which is vendor research, assigned "Potential value add: 1.50%" to behavioral coaching and put the total possible at about 3% in net returns. The same release says that 3% figure "should not be viewed as an annual addition" and is "more likely to be intermittent." Vanguard's June 2025 UK paper, also vendor research and about the UK market, says the actual value "may vary significantly." Keep those two papers separate. Different years, different markets, different figures.
Morningstar's 2025 report measured the average dollar in US mutual funds and ETFs at 7.0% a year against 8.2% for the funds themselves, over the 10 years ended Dec. 31, 2024. That's a 1.2-point gap. It also says not to read the finding as "dumb money," and notes that even steady paycheck investing and rebalancing can open a gap. That's a measurement of fund dollars. It says nothing about whether any advisor's fee is earned.
Complexity the calculator doesn't price. Tax planning, estate and insurance coordination, equity compensation. If you're buying those, the comparison is the whole package, not only the investment slice. In the 2022 Kitces report, tax planning shows up in the standard financial plan at 90% of advisors. That's the share of advisors who cover it, not the share of clients who get it. Ask what yours actually covers.
Small balances flip it. Here's the full tuple, because this one lies without it: $60,000, nothing added, 7% a year, 0% fund fee, 1% advisor fee, 10 hours of advice, planner at $300 an hour for 3 hours, so $900 a year.
At 10 years the percentage-fee route ends ahead by $1,154.24. At 30 years the planner route ends ahead by $37,036.08. The lines cross in year 14.
A $900 planner equals a 1% fee on $90,000, in year one only. After that the percentage keeps growing with the balance and the $900 doesn't. So the small-balance case isn't a verdict. It's a date.
Hourly planning requires you to act. The $82,562.19 assumes you carry out the plan. If you won't, it isn't real... it's a scenario with you in it.
Run the same inputs honestly. Count the hours. Count what you'd actually do after the plan lands. Then look at the unit.
Same move as the calculator that calls you out: take the vague percent and turn it into a number you can check.
Your fee has a price per hour. You can know it, or you can keep paying it without knowing.