Investment Growth Calculator: What Your Monthly Investing Really Builds

Alicia found the document in a drawer twelve years after she signed it, the day a friend casually mentioned checking whether her own advisor was “actually a fiduciary.” Alicia had never heard the word used that way before. The document — a two-page form her bank’s brokerage had handed her at account opening, which she’d skimmed for thirty seconds and filed away — spelled out, in the SEC’s own required language, that the person managing her retirement account was not required to act as a fiduciary at all times. She’d assumed “financial advisor” meant one specific legal promise. It doesn’t, and the government has required every firm to disclose exactly which promise applies since 2020, in a form almost nobody reads.

Alicia is a composite character — a stand-in for a pattern that shows up across an enormous share of people who invest through a bank or brokerage advisor, not a real account record. Her numbers are invented. Form CRS and the standards it discloses are not.

What “financial advisor” doesn’t specify on its own

The title “financial advisor” isn’t a licensed, standardized credential with one fixed legal duty attached to it. A registered investment adviser owes a fiduciary duty to a client under the Investment Advisers Act, continuously, across the entire relationship. A broker-dealer representative — often also called a “financial advisor” in casual conversation and in the branch signage of the exact same building — operates instead under the SEC’s Regulation Best Interest, which the SEC’s own rulemaking raised meaningfully above the old “suitability” standard, but which applies specifically at the moment a recommendation is made, not as a continuous duty across the whole relationship the way a fiduciary standard does.

The document that already told her, in writing

Since 2020, every broker-dealer and investment adviser has been required to give retail clients a short, standardized Form CRS — a customer relationship summary — disclosing which standard applies, what fees the firm charges, and what conflicts of interest exist. Alicia’s copy was sitting in a drawer the entire time, already answering the exact question her friend’s comment raised. The SEC built this specifically so investors wouldn’t need to decode legal jargon or ask the right question by accident — the document is designed to be readable in a few minutes. Almost nobody reads it at the moment it’s handed over, when it matters least and is least memorable.

Alicia’s actual arithmetic

Twelve years ago, Alicia’s advisor recommended an actively managed proprietary fund for her retirement account. Under the suitability standard that predated Reg BI, that recommendation only had to be appropriate for her risk profile and goals — it didn’t have to be the best reasonably available option. A comparable low-cost index fund existed the entire time, tracking a similar index at a meaningfully lower expense ratio, and was never mentioned. Over twelve years of compounding, the gap between the two funds’ expense ratios alone — paid every single year regardless of performance — consumed a real, countable share of what her account could have grown to.

Why Reg BI raised the bar without closing the gap entirely

Regulation Best Interest specifically requires a broker-dealer to consider reasonably available alternatives, including cost, when making a recommendation — a real improvement over pure suitability, where a product just had to fit the client’s profile regardless of cheaper comparable options. It’s also enforced at the level of each individual recommendation, and it stops short of the fiduciary standard’s continuous, whole-relationship obligation. For someone who wants that continuous duty applied to every decision, not just each recommendation as it’s made, an account with a registered investment adviser rather than a broker-dealer representative is a meaningfully different legal relationship — even when both people are called “financial advisor” on a business card.

What to actually do before your next investing conversation

Ask directly whether the person you’re working with is a fiduciary at all times, or only when making a specific recommendation — the answer is a factual one, not a sales pitch, and Form CRS already has it in writing if you still have your copy or can request a new one. Compare any recommended fund’s expense ratio against comparable index alternatives in the same category before committing, since that comparison is exactly what a stronger standard is supposed to force the advisor to make on your behalf, and checking it yourself costs nothing. And treat “financial advisor” as a job title, not a legal guarantee, until you’ve confirmed which specific standard applies to the relationship you’re actually in.

What this does not mean

This is not a claim that broker-dealer representatives are dishonest, or that every proprietary or actively managed fund is a bad choice — some genuinely outperform their category or serve a role an index fund doesn’t. Regulation Best Interest is also a real improvement over the suitability standard it replaced, not a cosmetic change. The point is narrower: two different legal standards exist under the same casual job title, the SEC requires a document that spells out which one applies to you, and reading it once is a better use of five minutes than assuming the stronger standard by default.

Frequently asked questions

Is Regulation Best Interest the same as a fiduciary duty?

No. Reg BI raised broker-dealer conduct standards above suitability and requires considering reasonably available alternatives, but it applies at the point of each recommendation. A registered investment adviser’s fiduciary duty applies continuously across the entire relationship, which is a meaningfully broader obligation.

How do I find out which standard applies to my own advisor?

Ask directly, and check your Form CRS — every broker-dealer and investment adviser must provide one, and it states in plain language which standard applies, along with the firm’s fees and conflicts of interest. You can also request a new copy if you’ve lost yours.

Does this mean I should switch to a registered investment adviser?

Not automatically — it depends on your own needs, account size and how much ongoing, continuous guidance you actually want. The point is knowing which standard currently applies to your relationship, so the choice is informed rather than assumed.

Is a higher expense ratio always a sign of a conflict of interest?

Not necessarily — some funds’ additional cost is justified by genuinely different strategy or access. But comparing it against a reasonably available, lower-cost alternative in the same category, and asking why the recommended option was chosen instead, is a fair question under either standard.

Statutory sources, all official: SEC, Regulation Best Interest, Form CRS and Related Interpretations; SEC Division of Trading and Markets, Regulation Best Interest and Form CRS. The framing of an unread Form CRS as a specific, quantifiable cost over time is Linqz’s own analysis, not a claim made by the SEC.

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Disclaimer: General information, not financial advice, and Linqz is not a registered investment adviser or broker-dealer. “Alicia” is a composite character with invented finances, not a real person. Regulatory standards and disclosure requirements are set by the SEC and can be updated — verify current guidance at sec.gov and investor.gov before acting, and consult a qualified professional about your own accounts.