What Does “Net of Fees” Really Mean? (And Why It Matters More Than You Think). Helping you to beat benchmarks by Lane Clark of TPP.

🧠 What Does “Net of Fees” Really Mean? (And Why It Matters More Than You Think)

If you’ve ever looked at an investment report and seen the phrase:

“Returns shown net of fees.”

You probably nodded and moved on.

But here’s the uncomfortable truth:

Most investors have no idea what that actually means.

And misunderstanding it could cost you hundreds of thousands over your lifetime.

Let’s unpack it properly.

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📉 Gross vs Net: The Illusion

There are two ways performance is presented:

Gross of fees – before costs are deducted
Net of fees – after costs are deducted

Sounds simple.

But here’s where it gets dangerous.

If a portfolio makes 8% gross and charges 2% per year, your real return isn’t “almost 8%.”

It’s 6%.

And that 2% doesn’t just reduce one year.

It compounds against you.

Every year.

For decades.

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🧮 The Compounding Drag No One Talks About

Let’s use a simple example.

£250,000 invested for 25 years.

• At 8% gross → £1,712,000
• At 6% net → £1,072,000

That’s a £640,000 difference.

Not because markets failed.

Because fees compounded.

This is what I call performance leakage.

And most traditional wealth managers operate in the 1.5%–2% total fee range once you add:

• Management fees
• Fund costs
• Platform fees
• Transaction charges

The result?

Even if they perform reasonably well…

You still lose massively over time.

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🏦 Why “Net of Fees” Is the Only Number That Matters

Investors don’t retire on gross returns.

They retire on what hits their account.

What matters is:

✔ What actually compounds
✔ What you can actually withdraw
✔ What remains after friction

The industry loves quoting benchmarks.

But very few advisers beat them after fees.

And that’s the key.

If the FTSE does 8% and you net 5.5% after layers of charges…

You haven’t outperformed.

You’ve subsidised someone else’s business model.

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🧠 The TPP Difference

At TPP:

• No management fee
• No performance fee
• No hidden drag
• Subscription model only

Which means when we show performance…

It’s real.

And when we aim to beat benchmarks by ~1.5x over time…

That’s measured net.

Because net is the only thing that matters.

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🚨 The Bigger Question

Before you ask:

“Is my adviser good?”

Ask this instead:

“What am I actually netting after all costs?”

Because a 1.5–2% annual drag over 20–30 years isn’t small.

It’s life-changing.

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🧮 Want to See the Difference?

Visit TPP to see how benchmark beating performance looks on our strategies NET OF FEES....Click here.

Or:

Schedule a FREE portfolio consultation call by clicking here.

Speak to the team who are disrupting a stale and outdated wealth management model.

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We look forward to assisting you.

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