**The Real Impact of 1% – Savings or Uplift**

Imagine you have a **£300,000** portfolio—this could be your pension, ISA, or general investment account. Now, think about the effect of a seemingly small **1%** either in excess fees you’re paying or additional returns you could be achieving. Let’s explore both sides with clear numbers and assumptions.

### Cutting Unnecessary Costs – The Power of 1% Reduction

Many financial advisers and networks charge layered fees that go towards supporting teams, managers, and directors, which can add unnecessary costs to your portfolio. You might think 1% doesn’t sound like much, but over time, it compounds—and not in your favor.

Here’s what you could save by reducing just **1%** in costs, assuming a **6% annual return** on your investments:

**Over 10 years:**A 1% saving means an extra**£3,000**saved each year. Compounding this yearly saving at 6%, your total savings grow to around**£34,782**.FV=3,000×((1+0.06)10−10.06)=£34,782FV = 3,000 \times \left( \frac{(1 + 0.06)^{10} – 1}{0.06} \right) = £34,782FV=3,000×(0.06(1+0.06)10−1)=£34,782

**Over 20 years:**That same 1% saved and reinvested annually compounds even further, growing to approximately**£90,377**at the same 6% annual return.FV=3,000×((1+0.06)20−10.06)=£90,377FV = 3,000 \times \left( \frac{(1 + 0.06)^{20} – 1}{0.06} \right) = £90,377FV=3,000×(0.06(1+0.06)20−1)=£90,377

**Over 30 years:**Over the long term, these yearly savings could grow to approximately**£232,995**. Each year’s savings are reinvested, working harder for you over time.FV=3,000×((1+0.06)30−10.06)=£232,995FV = 3,000 \times \left( \frac{(1 + 0.06)^{30} – 1}{0.06} \right) = £232,995FV=3,000×(0.06(1+0.06)30−1)=£232,995

This demonstrates the power of consistently saving £3,000 per year (1% of your £300,000 portfolio) and allowing it to grow with compounding. See base of article for a simplified visual of the calculations.

### The Impact of 1% Excess Fees – A One-Time Lump Sum

Let’s look at it from another perspective: the **total impact** of paying 1% in excess fees over the course of 30 years. If you’re paying 1% in fees each year on a £300,000 portfolio, that amounts to **£90,000** paid over 30 years.

Now, if instead of paying those fees, you kept that £90,000 and allowed it to grow untouched at **6%** annually, it would grow to approximately **£323,709** over 30 years. Here’s how:

FV=£90,000×(1+0.06)30=£323,709FV = £90,000 \times (1 + 0.06)^{30} = £323,709FV=£90,000×(1+0.06)30=£323,709

This calculation assumes you saved the full 1% in fees and allowed that sum to grow as a **one-time lump sum** invested at 6%. See base of article for a simplified visual of the calculation.

### Uplifting Returns by 1% – Unlocking Greater Growth

Now, what if you could **boost your returns by 1%** instead of simply reducing fees? Here’s the difference:

At a

**6%**annual return, your £300,000 portfolio could grow to**£1,723,047**over 30 years.FV=£300,000×(1+0.06)30=£1,723,047FV = £300,000 \times (1 + 0.06)^{30} = £1,723,047FV=£300,000×(1+0.06)30=£1,723,047

At

**7%**, the same portfolio would grow to**£2,283,677**over 30 years.FV=£300,000×(1+0.07)30=£2,283,677FV = £300,000 \times (1 + 0.07)^{30} = £2,283,677FV=£300,000×(1+0.07)30=£2,283,677

That’s an uplift of **£560,630**. Increasing returns, even slightly, can make a substantial difference over time because of the exponential effects of compounding. See base of article for a simplified visual of the calculations.

### The Bigger Picture

The key takeaway is that both **reducing costs** and **increasing returns** can have a significant impact over time:

**Cutting costs by 1%**could save you**£232,995**(through yearly savings reinvested) or**£323,709**(if the 1% excess fees were kept as a lump sum and compounded over 30 years).**Boosting returns by 1%**could grow your portfolio by**£560,630**over 30 years.

These examples show the importance of managing both fees and returns. If you’re currently with a high-cost adviser or network, it might be time to explore more efficient options that keep more of your money working for you.

### Let’s Get Specific

I’d love to offer you a **complimentary deep dive analysis** of your current portfolio. Whether we focus on cutting unnecessary costs or finding ways to improve returns, the numbers can speak for themselves. You could potentially uncover hundreds of thousands in additional value over the long term.

### Key Figures Recap:

**£300,000 portfolio over 30 years at 6%:**£1,723,047**£300,000 portfolio over 30 years at 7%:**£2,283,677**Savings from removing 1% in fees (yearly reinvestment):**£232,995**Savings from removing 1% in fees (one-time £90,000 lump sum):**£323,709**Extra growth from boosting returns by 1%:**£560,630

2024 Dimensional Matrix Book (visual preview below) …

### Simplified Calculation Visuals