This is true about vanguard fees being low. Ideally your advisor would only use Vanguard, but if they try to get you diversified into more exotic etfs or mutual funds, expect to pay a fee closer to 1% to be invested in that fund.

> But you're right. If manager charges 0.5% and fund charges 0.2% I'm still losing 0.5% of principal and 0.2% of my gains per year.

Be careful with your math here. It sounds to me like you think .2% fee is only on gains, however it also it on your principal.

Here is a concrete example.

You hire an advisor at .35% per year. In one scenario, they invest you in Vanguard S&P 500 for .04% a year. You will pay .39% a year of your principal in fees. In another scenario they invest you in a hedge fund fully, where the hedge fund charges 2% on principal and 20% on gains.

Here you will end up paying 2.35% per year, EVEN if you are losing money. And if you gain money. The hedge fund will take 20% from that. So best case you are paying 2.35% in principal fees, and pocketing 80% of the profit. Worst case, you pay 2.35% to lose money.

Two extremes of the fee spectrum, so likely you will end up somewhere between the two.

Be wary if you advisor tries to push you away from Vanguard and into a different brand (they can have incentives that don’t perfectly align with you). For instance A Charles Schwab advisor might push you to use a Charles Schwab branded s and p Mutual fund with .25% fee on top of his .35% fee. When the actual fund is exactly the same as the Vanguard one that is only .04% fee.