Is a 1.5% Advisory Fee Too Much — or the Best Investment You’ll Ever Make?
Retirement is full of decisions you can’t afford to get wrong.
I recently rented a car in Chapel Hill. The base rate seemed reasonable — until I reviewed the final agreement. Suddenly, there were charges I hadn’t anticipated: a vehicle license recoup fee, a concession recovery fee, a 6.5% surcharge, local tax, and an additional 8% tax. That “great deal” didn’t feel so great anymore. It’s a classic example of paying for something and wondering later if it was truly worth it.
Now, in contrast, there are approximately 5 million Americans who walk into Starbucks every day and happily pay $6 for coffee that costs just cents to make at home. Even McDonald’s offers a comparable drink for half the price.
And it’s not just coffee. The average American household spent over $3,500 dining out in 2023 — money that could have been saved by cooking at home. So why do people choose to spend more?
Because it’s not just about the food or the drink — it’s about the experience. The consistency. The convenience. The atmosphere. The comfort of a routine indulgence.
We rarely question the cost when the value is clear. But when a fee feels vague or transactional, resistance kicks in.
The better question isn’t, “What am I paying?”
It’s: “What am I getting in return?”
Baby Boomers and the New Retirement Reality
Most of your parents retired with pensions. Their employer — not the employee — was responsible for providing income security in retirement.
But that world is gone.
Baby Boomers are the first generation to retire without the widespread safety net of pensions. Instead, they’re relying on the 401(k) — a savings plan that was never intended to carry this kind of burden.
In fact, and this may be shocking to learn, the 401(k) was originally created as a compensation tool for high-earning executives — not as a retirement plan for the general public. It was never back-tested to answer critical questions like:
• How much do you need to save?
• How should you be invested over time?
• What is a safe withdrawal rate to ensure your money lasts?
Now, Baby Boomers are the first to test whether this system actually works.
And many are doing it alone — without a plan, without guidance, and with the full responsibility for retirement income offloaded onto them, rather than their employer.
Doug Orchard’s documentary, The Baby Boomer Dilemma, explores this shift in depth. It highlights how millions are stepping into retirement with tools that were never designed for decumulation — and little room for error.
And that’s the real issue: there’s no time to recover. You can’t “earn it back” or just save more later. Every decision you make — how and when to withdraw money, how much risk to take, when to claim Social Security — can either preserve your wealth or erode it quickly.
Avoiding a 1.5% fee might feel prudent — but with the full weight of retirement risk on your shoulders, it may be penny wise and pound foolish.
You’re Not Paying for Investments — You’re Paying to Avoid Irreversible Mistakes
Working with a financial advisor isn’t just about managing money — it’s about managing outcomes. Especially in retirement, where every decision can either preserve your wealth or quietly erode it.
A landmark study by Vanguard, “Putting a Value on Your Value: Quantifying Vanguard Adviser’s Alpha” (June 2020), found that individuals who work with a financial advisor see approximately 3% higher net returns annually. But that added value doesn’t come from picking the right stock — it comes from coordinated tax strategy, withdrawal sequencing, behavior coaching, and holistic financial planning.
Here’s Where the Value of a Fiduciary Advisor Shines
• Tax-Efficient Withdrawal Planning
The wrong withdrawal strategy can quietly cost you six figures over time. A fiduciary advisor helps:
• Match asset location to withdrawal sequencing
• Minimize RMD-driven tax spikes
• Use Roth conversions and QCDs to manage tax brackets
• Roth Conversions
Done right, Roth conversions create decades of tax-free growth and future flexibility. Done wrong, they cause tax spikes and Medicare surcharges. A knowledgeable advisor helps time and size these conversions appropriately.
• Investment Risk Management
Too much risk invites early-retirement losses. Too little risk creates longevity and inflation concerns. A good advisor helps strike the right balance — aligned to your goals and retirement timeline.
• Long-Term Care & Health Planning
70% of people over 65 will need long-term care. With costs often exceeding $8,000/month, a plan is essential. An advisor helps:
• Weigh insurance options vs. self-funding
• Build asset protection strategies
• Create peace of mind for you and your family
• Social Security Optimization
Claiming too early or without coordination can cost you for life. A fiduciary advisor can:
• Run break-even and longevity models
• Factor in tax, IRMAA, and spousal benefits
• Integrate claiming into your full income plan
• Wealth Transfer and Estate Planning
Without proper planning, your heirs may face unnecessary taxes and complications. An advisor ensures:
• Efficient account titling
• Updated beneficiary designations
• Tax-smart legacy strategies
The Bottom Line: Penny Wise or Purpose-Driven?
Avoiding a 1.5% advisory fee might seem like a smart move — until you consider what that fee is really buying you. It’s not about trying to beat the market; it’s about avoiding the mistakes that can quietly and significantly erode your wealth over time. From unnecessary taxes and poorly timed withdrawals to Medicare surcharges, missed Social Security opportunities, and estate planning gaps — the risks are significant and often irreversible.
If you’re paying a 1.5% advisory fee for solely investment management, you may be overpaying.
But if your advisor is managing your investments and:
• Coordinating taxes, income, health care, and estate planning
• Helping you avoid irreversible mistakes
• Strategically managing your financial life through retirement
Then that 1.5% isn’t a cost — it’s a value.
Because in retirement, you’re not just managing a portfolio.
You’re managing outcomes.
And getting those outcomes right?
That might be the best investment you ever make.
As you navigate today’s uncertainty, ask yourself:
If you’re stepping into retirement without a guide, are you saving money — or risking far more?
About the Author
Victoria Larson, RICP® is an independent, fiduciary financial advisor and founder of Vitality Investments. With over 20 years of experience in the financial services industry, she specializes in holistic, retirement-focused planning. Her work helps clients protect, grow, and use their assets in ways that align with their goals and values. Victoria partners closely with individuals and families to build income security, minimize taxes, and prepare for life’s financial uncertainties.
Investment advisory services offered through Brookstone Wealth Advisors, LLC (BWA), a registered investment advisor and an affiliate of Brookstone Capital Management, LLC. BWA and Vitality Investments are independent of each other. Insurance products and services are not offered through BWA but are offered and sold through individually licensed and appointed agents. Index or fixed annuities are not designed for short term investments and may be subject to caps, restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer. Please refer to our firm brochure, the ADV 2A Item 4, for additional information. Registered Investment Advisors and Investment Advisor Representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interests of our clients and to make full disclosure of any conflicts of interests. Please refer to our firm brochure, the ADV 2A item 4, for additional information.
