The cost of doing nothing, compounded

A widely cited Financial Engines / Aon Hewitt study found that participants who used professional help earned a median of about 3.32 percentage points more per year than those who did not. Move the slider to see how that gap compounds on a sample $250,000 balance over time.

What this illustration shows

Both lines start at the same $250,000 and grow at a constant annual rate. The baseline grows at an illustrative 5.00% per year; the managed line grows at 8.32% per year — 3.32 percentage points higher. Drag the slider and the four figures above update: the baseline ending value, the managed ending value, the dollar difference, and how much larger the managed value is as a percentage of the baseline.

Constant annual returns and a fixed starting balance make the math easy to follow. Real accounts do not work that way. Returns vary every year, contributions and withdrawals change the balance, fees reduce results, and any single year — or several in a row — can be negative. Compounding magnifies whatever returns occur, in either direction.

This is a math illustration only. It is not a projection, a forecast, or a guarantee of future returns, and it does not predict what any particular account or adviser will earn. The 3.32% annual difference is drawn from a Financial Engines / Aon Hewitt study comparing participants who used professional help with those who did not; it represents a historical median across the studied group and does not mean every managed account outperforms, or that any specific adviser will add 3.32% in returns to your plan.

The starting balance ($250,000), the 5.00% baseline rate, the 8.32% managed rate, and the assumption of constant annual returns are illustrative inputs chosen for this calculation; they do not reflect any actual account, fund, or service. The chart shows the effect of compounding at fixed rates only. It excludes fees, taxes, inflation, contributions, withdrawals, and investment risk. Past performance does not guarantee future results. Investment results can be negative, and you can lose principal.

This page and ICS Financial provide general educational information only. They do not provide personalized investment recommendations, account management, or ongoing monitoring without an executed advisory agreement.