The Behaviour Gap – How Much Will It Cost You?

In a previous blog post about advised vs. unadvised returns, I referenced “Behavioural Gap,” the difference between what the market returns and what the average DIY investor returns. 

For just a few minutes, please stop whining about the fees and look at the actual numbers nobody wants to post on Reddit.

DALBAR QA 2024 (40-year study, updated March 2024): • S&P 500 average annual return  10.71% • Average equity-fund investor return 5.67%

Behavioural gap = −5.04% per year

That’s what the average investor loses purely due to their own emotions and timing disasters.

Now do the math on a $2M portfolio over 25 years, assuming a 2% overall fee (a bit high, but easy math for demonstrative purposes):

You don’t pay us 2%. You pay us 2% to prevent a $20.5 million behavioural train wreck and still walk away $9.4 million richer than if you “saved” the fee and piloted it yourself.

That’s not a cost. That’s a 470% return on the fee itself.

We get it—2% (or, really ANY level of fee) feels painful in a spreadsheet when the sun is shining. It feels like the deal of a lifetime the first time the market drops 30% and you don’t have to make a single decision alone.

We’re going to be here when the “I’ll save the fee” experiment starts costing you sleep. No judgment. Just math. To a good financial future!