Why are Fees Important?

Let me ilustrate this by giving you a simple example:

10,000$  Human Advisor Robo Advisor
Annual return 5% 5%
Annual fees 1.25% 0.5%
Value in 20 years 20,696$ £24,014$

Even if you chose a robo-advisor with a relatively high fee of 0.5% it will still be significantly less than using the services of a human advisor.

This is exactly like the effect compound interest has on your savings, only in the opposite direction. The fees compound just the same. The longer you invest, the more dramatic the change.

 

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