The true cost of management fees: how much do they really eat into your capital in the long term?

Calculate the true cost of your management fees

Enter your capital amount, investment horizon, and current contract fees (found in your terms and conditions or annual statement). The simulator will project the difference in final capital between your current situation and a cost-optimized investment structure. Your data is neither stored nor transmitted.

Why management fees are the most underestimated cost of wealth

Most savers view management fees as a line item with a few decimal places on their annual statement. This is a misinterpretation. Fees don't add up, they compound—just like interest, but in reverse.

A fee of 1 % deducted annually does not cost 1 %. It costs 1 % of the year's capital, plus 1 % of all the returns that capital would have generated had the fee not been deducted, plus 1 % of the returns on those returns, and so on over the entire investment horizon. This is the mechanism of negative compounding.

In concrete terms: on €200,000 invested for 30 years at a gross return of 6%, a contract with total fees of 1% yields a final capital of approximately €880,000. The same capital, in a contract with total fees of 2%, yields approximately €760,000. The difference—€120,000—is not insignificant. It represents more than half of the initial capital invested, lost solely to fees.

What most advisors will never say is that this difference of 1 % corresponds very precisely to the structural difference between a contract distributed by a banking network and a contract subscribed in open architecture with an advisor.

The 4 layers of costs that this simulator breaks down

Layer 1: Contract management fees

Deducted annually from the outstanding balance, these fees compensate the insurer or account holder. For assurance-vie policies, they range from 0.5% (online contracts, open architecture) to 1% or more (bank network contracts). This applies to both euro funds and unit-linked funds.

Layer 2: Unit-linked fees (the TER)

This is the most opaque layer. Each fund, UCITS, or ETF in your contract has its own internal cost—the Total Expense Ratio (TER). It doesn't appear on your statement; it's deducted directly from the fund's net asset value. An actively managed fund typically charges 1.5 to 2.5 TERs. An equivalent index ETF charges 0.1 to 0.3 TERs. On this single layer, the difference amounts to tens of thousands of euros over time.

Layer 3: Arbitration and entry fees

One-off fees are charged with each payment (entry fees, up to 5% on some older contracts) or with each reallocation (arbitrage fees). A modern, open-architecture contract often reduces these fees to zero.

Layer 4: Retrocessions

This is the crux of the issue of objectivity. In the traditional distribution model, the distributor receives a commission—a share of the fund's management fees—paid by the management company. This commission creates a structural conflict of interest: the distributor is incentivized to recommend the funds that pay them the most, not those that best serve the client. A fee-based advisor does not receive these commissions, or passes them on entirely to the client.

Case study: Thomas, 41 years old, business owner in Lyon

Thomas has a assurance-vie policy opened 8 years ago in his bank, with €250,000 invested, investment horizon 25 years, target gross return 6 %.

Fee structure of his current contract, as revealed by the simulator:

Actual net return after expenses: 6 % − 2.91 % = 3,09 %

Projection at 25 years:

Thomas loses the equivalent of 292 000 € — more than his initial capital — solely due to the fee structure of his contract. The simulator makes this difference visible in 90 seconds.

How to structurally reduce the cost of your expenses

Identifying the problem is one thing. Fixing it requires a method. Three levers, in order:

1. Auditing the existing situation. Before transferring anything, we map out the true costs of each contract — including hidden TER charges that your statement doesn't show. This step almost always reveals unexpected costs.
2. The trade-off between keeping and transferring. An older contract may still offer a tax advantage (if it's over 8 years old), justifying its continued use despite higher fees. The calculation is never straightforward: the potential savings in fees must be weighed against the possible loss of tax advantages. This is a trade-off that can be analyzed using a model.
3. Reconstruction using open architecture. Contract with reduced fees, units of account selected from across the market for their performance-cost ratio, and above all: transparent remuneration for the advisor, based on fees, without retrocession.

Our enhanced wealth management intelligence models these three levers simultaneously and precisely quantifies the net gain of a repositioning, including tax history.

Designed by Alexis Sagnier

Wealth Management Advisor, member of ANACOFI. Specialist in international wealth management, Alexis assists executives, expatriates and expatriate managers in optimizing their financial structure.

The simulator incorporates the 2026 macroeconomic parameters (Livret A rate, INSEE inflation, PFU taxation) and the allocation models used by the firm.