Consumers in the United States paid $600 billion last year on financial services fees. A new startup is trying to change that.
Calling themselves the “Robin Hood of Fees,” the founders of FeeX are trying to bring transparency to consumers, helping them find and reduce fees that can be avoided.
“The sad reality is that more than one third of your retirement savings would be evaporated due to these fees,” said Yoav Zurel, a co-founder of FeeX and the current CEO. The company aims to solve this problem by showing consumers exactly how much they could avoid in financial fees.
Since its beginning in September 2012, the company’s users have saved over $300 million. According to the website, FeeX has over $2 billion “under protection.”
So how do you find your hidden fees? It’s easy, really. Using FeeX’s free online tool, scan your investment accounts for fees you have been unwittingly paying. FeeX then recommends lower-fee alternatives to save you money. According to the website, the average user can save $18,794.
The process is quick, accessible, and easy to understand – probably because it was designed by tech gurus, not financial wizards. “Although FeeX is a Fintech company, none of the FeeX founders came from the financial world,” said Zurel. “In fact, we were all software engineers that simply got tired of paying fees that we didn’t understand.”
Right now, the service only supports IRA, 401(k), and brokerage accounts. In the future, however, Zurel said that the company hopes to add service for all financial products. Eventually, this may entail a premium service that helps keep the company running. “FeeX would become your trustworthy friend that tells you how much you are really paying and offers help to reduce these fees down,” said Zurel. For now, FeeX is supported by several venture capital firms, Blumberg Capital and Horizons Ventures, allowing the service to keep functioning for free.
One of the biggest challenges is customer awareness. Most people who have investments don’t realize the fees they are paying, making it difficult for FeeX to let people know that their service is valuable. But once people find out, they are amazed by how much they can save.