Benzinga: Paying 1% on a $1.5 Million Portfolio? Here's What It Could Be Costing You
Double-digit returns and low expense ratios are what investing dreams are made of. But sometimes it doesn't work out that way. Sometimes you have to pay for performance that isn't always guaranteed.
That predicament is exactly what one investor with a $1.5 million portfolio is facing. Frustrated by paying 1% in fees for 6% returns, he is questioning whether he should replace his financial advisor or if he needs one at all.
After all, if his portfolio is underperforming the S&P 500, which is up 8.1% year-to-date, what is the point of paying someone to manage his money?
Whether or not he should fire his financial advisor comes down to more than the performance in a given year. It depends on what the investor wants out of the relationship, says Savant Wealth Management financial advisor Derrick Longo.
"One percent is the industry average for really large RIAs that don't do discounted fees," Longo told Benzinga. "If the fee is a huge friction point or is the focal point of the relationship, then there are discount brokers out there who can serve him better."
Or, if he has the confidence in his own investing prowess and can handle the ups and downs of the market, he may not need an advisor at all, says Longo.
More Than Just Management
If the investor is looking for a more holistic approach to financial planning, then a financial advisor can provide that — whether it’s managing investments, limiting tax exposure, helping with retirement and estate plans or all of the above.
"Managing your investments is one part of a much bigger picture," says River Wealth Advisors wealth advisor Bradford Houchins, CFP®. If the advisor is just managing the account, then the 1% fee may not be justifiable. But if he or she is focused on the long-term plan, the best income and tax strategies and the full spectrum of financial planning, then the 1% fee is usually worth it, he told Benzinga.
Chasing Returns Isn't Always Enough
Returns are another issue that can easily fray a relationship between an investor and an advisor. But before the investor can bemoan the 6% returns, he has to make sure he understands what he owns and how that stacks up to the benchmark he is comparing it to, says Longo.
"Everyone wants to compete with the S&P 500, but their portfolio is not pure large-cap growth. It's not apples to apples comparing it to the S&P," he says.
Houchins agrees returns are important, but he says the investor has to think about the consequences of taking on more risk to chase better returns. Sure, he will be happy when the markets are on a tear, but can he say the same when the markets go south?
Shop Around
Before taking any action, Houchins says the investor should have a conversation with the advisor and vocalize why he is not happy with the returns. "It could be your returns are appropriate for your risk-taking, or what you are comparing it to is not appropriate," says Houchins.
If he decides to find a new financial advisor, it's important to take time to interview different ones to make sure the personalities match.
"You never want to feel like you're being sold something," says Houchins, noting that the advisor should be a fiduciary and have the proper credentials, including certified financial planner, chartered financial analyst and chartered financial consultant. A fiduciary doesn't make a commission selling specific financial products, but a broker does. "This is somebody who is going to have trust with a lot of information," says Houchins.
Building Wealth Across More Than Just the Market
Building a resilient portfolio means thinking beyond a single asset or market trend. Economic cycles shift, sectors rise and fall, and no one investment performs well in every environment. That's why many investors look to diversify with platforms that provide access to real estate, fixed-income opportunities, professional financial guidance, precious metals, and even self-directed retirement accounts. By spreading exposure across multiple asset classes, it becomes easier to manage risk, capture steady returns, and create long-term wealth that isn't tied to the fortunes of just one company or industry.
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Sources: Flippin, Meg. “Is It Time To Fire Your Financial Advisor If A 1% Fee On Your $1.5M Account Leaves You With Only A 6% Return?”., May 22, 2026.
Please Note: Past performance does not guarantee of future results. Performance example given is purely educational in nature and not reflective of the experience of any specific client. Index return numbers stated are accurate as of the date of article publication and all investing comes with risk, including risk of loss.
The scope of any financial planning and consulting services to be provided depends upon the terms of the engagement, and the specific request and needs of the client. River Wealth does not serve as an attorney, accountant, or insurance agent. River Wealth does not prepare estate planning documents or tax returns, nor does it sell insurance products. Click here to review all disclosures. Advisory fees and compensation arrangements vary and are described in the firm’s Form ADV.