I recently read a blog post from a peer titled “The Silent Compounding Cost of a 1% Fee,” which breaks down the impact of ongoing advisory fees on investment growth.  The author argued that a 1.00% advisory fee erodes an investment portfolio.  Using a $1 million portfolio earning 7% annually, the author illustrates how a 1% annual fee could reduce the ending value by nearly $188,000 over ten years.  The erosion included the fees paid over ten years, plus the loss in potential growth due to the management fees.   

The math is correct, but it tells only part of the story. 

At Bloom Advisors, we welcome these conversations because they allow us to highlight the full value we provide to our clients, which goes well beyond portfolio management. 

Why Investors Underperform Their Investments 

The article assumes a smooth 7% return over 10 years, but markets don’t move in straight lines, and neither do investor emotions. Volatility, fear, and media headlines often lead individuals to make poor decisions at the wrong time. That’s where an experienced advisor makes a meaningful difference. 

Behavioral studies consistently show that investors often earn less than the funds they invest in, simply because they try to time the market or let emotions dictate decisions. At Bloom Advisors, we act as a guide—helping clients avoid panic selling, chasing performance, or making short-sighted moves that could do far more damage than a 1% fee. 

What You Get for 1%

When clients work with Bloom Advisors, they’re not just paying for investment management. They’re receiving a long-term partnership focused on every aspect of their financial lives, including: 

• Comprehensive financial planning: Retirement projections, tax strategy, cash flow analysis, insurance reviews, and estate coordination. 

• Ongoing investment management: Globally diversified portfolios tailored to your goals and risk tolerance, regularly monitored and rebalanced. 

• Tax-smart strategies: We incorporate tax-loss harvesting, asset location, and distribution planning to help improve after-tax outcomes. 

• Behavioral coaching and accountability: We help clients stay focused on their long-term plan, especially when markets are turbulent. 

• Life planning support: From career transitions to retirement, from caring for aging parents to leaving a legacy—we help you make confident decisions. 

To kick off 2025 (and our 41st year in business!), we put together a list of 25 ways we can add value for clients. The list summarizes the obvious work a financial planner provides, but also the less obvious situations when you could use a trusted advisors’ guidance. 

A Fee… or an Investment? 

Rather than viewing the 1% advisory fee strictly as a cost, we encourage clients to ask: 

• Has my advisor helped me avoid costly mistakes? 

• Has working with Bloom Advisors provided clarity and peace of mind? 

• Am I more financially organized and confident about my future? 

• Am I closer to achieving my financial goals and objectives?   

If the answer to these questions is yes, then the fee is not just an expense—it’s an investment in your financial future. 

The Bottom Line 

We agree with the blog on one crucial point: investors should understand what they’re paying and why. However, we believe the focus should be on value, not just cost. At Bloom Advisors, our mission is to deliver meaningful, measurable value far exceeding our fee, year after year. 

If you’re wondering whether you’re getting the value you deserve from your current advisory relationship, we invite you to have that conversation with us.