True all-in cost
What does this portfolio actually cost you each year?
Add three line items: advisor fee, average fund cost, and an estimated tax cost from portfolio income. The output is neutral: annual dollars, basis points (bps, or hundredths of one percent), and the assumptions behind the estimate.
AUM means assets under management: the percentage charged on the portfolio value each year.
Expense ratio is the annual fund cost. Use the portfolio-weighted average across ETFs and mutual funds.
Tax drag inputs
Tax drag is the annual tax cost created by taxable portfolio income. This simplified estimate separates stock distributions from bond interest.
Federal marginal rate: 32% — based on $500,000 of taxable income, married filing jointly, using the 2026 schedule. Bond drag uses this rate; stock drag is held flat at 0.5% to represent typical qualified-dividend + small LT-gain churn on indexed equity.
Total annual cost
$46,240
231 bps · 2.31% of portfolio
| Line item | Annual $ | bps |
|---|---|---|
| Advisor fee (AUM) | $20,000 | 100 |
| Fund expense ratios | $10,000 | 50 |
| Estimated stock tax drag (0.5% × $1,200,000) | $6,000 | 30 |
| Estimated bond interest tax ($800,000 × 4.00% × 32%) | $10,240 | 51 |
The full Cost & Performance feature in Ironlake compares your all-in cost to your IPS policy benchmark, breaks out tax drag from actual realized distributions per holding, and generates a quarterly meeting agenda for advisor conversations.
Open IronlakeHow this is computed
Annual cost equals advisor fee plus fund expense ratios plus estimated tax drag. Basis points are hundredths of one percent, so 100 bps means 1.00% of the portfolio value per year.
The tax estimate uses the 2026 federal bracket schedule, a flat 0.5% stock-distribution drag for indexed equity, and ordinary-income tax on the bond sleeve's stated yield. It assumes the entire modeled portfolio is taxable.
This does not model asset location, tax-deferred or tax-free accounts, NIIT, state tax on bond interest, active-fund capital-gain distributions, or per-holding turnover. Use it as a first-pass cost picture, not a complete tax projection.
Illustrative only. Consult your tax and investment professionals before making decisions from any cost estimate.