--- title: Are you getting value for money from your investment adviser? description: In this post we'll compare a typical investment adviser's performance and fees to ISACO's over a 10 year time span. image: https://www.isaco.co.uk/hs-fs/file-17862543-jpg/images/isaco_vs_an_investment_adviser.jpg --- [![investment guidance service](https://www.isaco.co.uk/hs-fs/file-17903709-png/images/template/logo.png)](https://www.isaco.co.uk/) 0800 170 7750Monday to Friday 8.30am - 6.00pm [Client Log-In](http://members.isaco.co.uk/wp-login.php) - [![x](https://www.isaco.co.uk/hs-fs/hubfs/images/template/social-icons/x.png?width=24&height=24&name=x.png)](https://twitter.com/isaco_) - [![linkedin](https://www.isaco.co.uk/hs-fs/hubfs/images/template/social-icons/linkedin.png?width=24&height=24&name=linkedin.png)](http://www.linkedin.com/company/isaco-ltd) - [![facebook](https://www.isaco.co.uk/hs-fs/file-17902759-png/images/template/icon-facebook.png)](http://www.facebook.com/pages/Isaco/261073283963679) - [![twitter](https://www.isaco.co.uk/hs-fs/file-17903368-png/images/template/icon-twitter.png)](https://twitter.com/isaco_) - [![linkedin](https://www.isaco.co.uk/hs-fs/file-17903004-png/images/template/icon-linkedin.png)](http://www.linkedin.com/company/isaco-ltd) # Are you getting value for money from your investment adviser? Posted by [Paul Sutherland](https://www.isaco.co.uk/blog/author/paul-sutherland) on Thu, Feb 23, 2012 @ 02:10 PM - [Tweet](https://twitter.com/share) ![ISACO vs an investment adviser](https://www.isaco.co.uk/hs-fs/file-17862543-jpg/images/isaco_vs_an_investment_adviser.jpg?width=297&height=197&name=isaco_vs_an_investment_adviser.jpg)In this post, I'd like to take you through the likely performance of financial or investment adviser over a ten year time span. We'll then compare this to ISACO. We'll use an investor with a £250,000 ISA and SIPP portfolio as an example. As we've covered in [previous posts](https://web.isaco.co.uk/blog/bid/123787/The-consequences-of-poor-investment-performance), the majority of investment advisers fail to achieve 7% growth per year. However, in this example we'll give them the benefit of the doubt and imagine that over this 10 year period they ‘match’ the stock market’s performance. ## Investment adviser Here's what a typical investment adviser might achieve for this investor. | Year | Capital start of year before fee taken (£) | 2% annual fee (£) | Amount after fee (£) | Capital growth aim | Capital value end of year (£) | Cash flow at 5% | | --- | --- | --- | --- | --- | --- | --- | | 1 | 250,000 | 5,000 | 245,000 | 7% | 262,150 | N/A | | 2 | 262,150 | 5,243 | 256,907 | 7% | 274,890 | N/A | | 3 | 274,890 | 5,498 | 269,392 | 7% | 288,249 | N/A | | 4 | 288,249 | 5,765 | 282,484 | 7% | 302,258 | N/A | | 5 | 302,258 | 6,045 | 296,213 | 7% | 316,948 | N/A | | 6 | 316,948 | 6,339 | 310,609 | 7% | 332,351 | N/A | | 7 | 332,351 | 6,647 | 325,704 | 7% | 348,503 | N/A | | 8 | 348,503 | 6,970 | 341,533 | 7% | 365,440 | N/A | | 9 | 365,440 | 7,308 | 358,132 | 7% | 383,201 | N/A | | 10 | 383,201 | 7,664 | 375,537 | 7% | 401,824 | £20,091 | *For illustrated purposes only.* ## ISACO Next we’ll look at what could happen to this investor's capital if he or she chooses to get investment guidance from ISACO. Even though we generally say that 12-15% growth per year is our aim, ISACO’s Chief Investment Strategist’s investment outlook over the next decade is for a ‘very strong upwards trending market’ which could result in returns of 15%-20% per year. However there is no guarantee his outlook will materialise and therefore, to be conservative, we’ve used a 12% annual growth aim. | Year | Capital start of year before fee taken (£) | Initial fee (£) | Service fee (£) (1%) | Amount after fee (£) | Capital growth aim |  Capital value end of year (£) | Cash flow at 5% | | --- | --- | --- | --- | --- | --- | --- | --- | | 1 | 250,000 | 2,995 | 2,500 | 244.505 | 12% | 273,846 | N/A | | 2 | 273,846 | 0 | 2,738 | 271,108 | 12% | 303,641 | N/A | | 3 | 303,641 | 0 | 3,036 | 300,605 | 12% | 336,678 | N/A | | 4 | 336,678 | 0 | 3,367 | 333,311 | 12% | 373,308 | N/A | | 5 | 373,308 | 0 | 3,733 | 369, 575 | 12% | 413,924 | N/A | | 6 | 413,924 | 0 | 4,139 | 409,785 | 12% | 458,959 | N/A | | 7 | 458,959 | 0 | 4,590 | 454,369 | 12% | 508,893 | N/A | | 8 | 508,893 | 0 | 5,089 | 503,804 | 12% | 564,260 | N/A | | 9 | 564,260 | 0 | 5,642 | 558,618 | 12% | 625,652 | N/A | | 10 | 625,652 | 0 | 6,256 | 619,396 | 12% | 693,724 | £34,686 | *For illustrated purposes only * ## The results - ISACO vs an investment adviser Now lets take the data from both of these tables and make some sense of it. Let’s compare the factors that we find are the most important to our clients.  - Total cost of client fees - Cost of client fees per year - Profit made for client over 10 years - Cumulative gain made over 10 years - Annual % gain after fees - Annual cash flow generated ### Results - 10 Year Performance and Fees Comparison | Results | Adviser | ISACO | | --- | --- | --- | | Total cost of client fees | £62,479 | £44,085 (Fee savings of 29.4%) | | Cost of client fees per year | £6,248 | £4,409 (Fee Savings of 29.4%) | | Profit made for client | £151,824 | £443,724 (Profit increase of 192.3%) | | Cumulative gain realised | 60.7% | 177.5%  (Gain increase of 116.8%) | | Annual % gain after fees | 4.9% | 10.7% (Gain increase of 5.8%) | | Annual cash flow generated* | £20,091 | £34,686 (Cash flow increase of 73% | *5% annual cash flow Many people are shocked when they see these results. The worst situation for an investor is when their investment adviser charges too much, gives poor service and underperforms the market. In this case the fees an investment adviser charges are clearly not justified. However the flip side of this is when your adviser charges you a fair fee, with good service and helps you outperform the market. I'm sure you'd agree, in this scenario an adviser's fees are justified. ### About ISACO We specialise in providing a premium [Investment Guidance Service](https://www.isaco.co.uk/content/investment_guidance) for ISA and SIPP investors with portfolios in excess of £100,000. Our mission is to help investors achieve better performance over the long-term, better protection in falling markets and at a better price. 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