The fair test is not “did I beat the S&P 500?” It is “did I do better, after all fees, than a cheap portfolio taking the same risk?” Here is how to run that test, plus the documents and questions that cover everything returns cannot.
Compare what your account earned after every fee with what a simple, low‑cost portfolio taking the same risk would have earned over the same period. That simple portfolio is a risk‑matched benchmark. If your advisor’s portfolio did about as well as the benchmark with similar ups and downs, it did its job on the investment side. If it trailed by more than the fees, ask why.
Use a full market cycle where you can: at least three years, ideally five. Any single year is mostly noise. Even professional managers trail the index often; S&P Dow Jones Indices’ SPIVA U.S. Year‑End 2025 scorecard found that 79% of active large‑cap US funds trailed the S&P 500 in 2025. Your question is narrower and fairer: did your portfolio earn its fees for the risk it took?
Only if your portfolio is meant to be 100% US large‑cap stocks. Most advised portfolios hold bonds, cash or international stocks to reduce risk, so they should trail an all‑stock index in strong years and fall less in bad ones. Exent’s backtests, July 2016 to September 2026:
| Backtest, Jul 2016 – Sep 2026 | Return a year | Volatility | Worst fall (month-end) |
|---|---|---|---|
| S&P 500 (buy and hold) | 15.2% | 15.2% | −23.9% |
| 60/40 stocks and bonds (SPY 60% / AGG 40%, monthly rebalanced) | 9.5% | 10.1% | −20.0% |
A 60/40 portfolio that earned about 9.5% a year over this period matched its fair benchmark, even though it trailed the S&P 500 by more than five points a year. We explain the general problem in why the S&P 500 is the wrong benchmark.
Match the benchmark to the mix your advisor agreed to run, using cheap index funds for each part. Your investment policy statement or account documents usually state a target such as “moderate, 60% equity”. Then compare over the same dates. Illustrative example over four years:
| Illustrative, 4 years | Advised account (after all fees) | Risk-matched benchmark (index funds, after fund fees) |
|---|---|---|
| Target mix | 60% stocks / 40% bonds | 60% total-market stock fund / 40% aggregate bond fund |
| Return a year | 6.1% | 7.0% |
| Worst fall | −17% | −16% |
| Difference | −0.9 pts a year |
In this illustration the account took similar risk and trailed by 0.9 points a year, about the size of a typical advisory fee. That is not automatically bad. It means the investment side delivered the market’s return minus the fee, and the case for the fee rests on the planning and other services. A gap much larger than the fee, or much deeper falls than the benchmark, is worth a conversation.
Know the total, in dollars, and compare it with the market. Kitces Research’s 2024 survey of advisors, summarized in Kitces’ June 2025 review of advice fees, uses a median 1% asset‑based fee for a $1 million client as its reference point, and fees usually step down for larger accounts. On top of that come the expense ratios of the funds inside the account.
Small percentages compound. The SEC’s investor bulletin on fees (July 2025) shows $100,000 growing 4% a year for 20 years ending near $208,000 with a 0.25% annual fee, $198,000 with 0.50% and $179,000 with 1%. Our fee drag calculator runs the same math on your own numbers, and how to check fund fees covers the fund layer.
Judge the services you are paying for. Many advisors earn their fee mostly through planning: retirement income, tax strategy, estate and insurance coordination, and keeping clients invested through bad markets. Vanguard’s Advisor’s Alpha research estimates that advisors following its best practices can add up to, or even exceed, 3% in net returns, and says that value arrives irregularly, often during market stress, rather than every year.
So ask yourself what you actually used in the past year. If you received a written plan, tax work and steady guidance in a selloff, the fee bought more than portfolio management. If you mainly received a quarterly statement, the investment comparison above carries most of the weight.
Three free sources cover fees, conflicts and history. SEC‑registered advisers and brokers must give retail investors a Form CRS relationship summary covering services, fees, conflicts of interest, the standard of conduct and any disciplinary history.
| Source | What it shows |
|---|---|
| Form CRS (Investor.gov/CRS) | Services, fees and costs, conflicts, conduct standard, conversation-starter questions |
| SEC Investment Adviser Public Disclosure (adviserinfo.sec.gov) | Registration, Form ADV brochure with fee schedule, disciplinary information |
| FINRA BrokerCheck (brokercheck.finra.org) | Broker registration, employment history, customer complaints and disclosures |
Also ask whether your advisor acts as a fiduciary on all of your accounts, and how they are paid.
Take a recent statement and check its structure independently: compare the portfolio with a risk‑matched benchmark, replay it through past crashes and look for concentration and overlap. The second‑opinion check guide walks through it. A check like this does not judge your advisor’s planning work. For a broader look at the trade‑offs, see a portfolio tool vs a financial advisor.
Compare your net-of-fee return and worst fall with a low-cost index mix of the same risk over three to five years, and check that you receive the planning services you pay for.
Not necessarily. A portfolio with bonds should trail an all-stock index in rising markets; in Exent’s 2016–2026 backtest a 60/40 mix returned 9.5% a year against 15.2% for the S&P 500.
Roughly the return of the market mix they run for you, minus fees, in most years. Past results of a matching index portfolio are a fair yardstick; no return can be promised.
At least three years, ideally a full market cycle including a decline, because one year of returns says little about skill or risk control.
Use the SEC’s Investment Adviser Public Disclosure site and FINRA BrokerCheck. Both are free and list registrations and reported disclosures.
Upload a statement screenshot and Exent compares it with a risk‑matched benchmark, replays past crashes and flags overlap.
Educational content, not investment advice. Examples are illustrative; past performance does not guarantee future results.