What is FeeX?
Nearly all investments — including those in IRA, 401(k), 403(b), 457 and brokerage accounts — have fees. FeeX is a free service that finds these fees and helps you reduce them.
FeeX’s mission is to make sure you keep as much of your own money as possible, instead of losing it to excessive fees. FeeX does not evaluate your investment choices or strategy. Instead, FeeX finds ways for you to invest according to your choices while paying the lowest fees available.
In order to help you switch to similar low-fee alternatives, FeeX presents alternative investments with better past returns (when possible) than your original investments.
How does FeeX work?
What kinds of fees do investments have?
It’s simple and only takes a few minutes:
- Step 1: Create a free FeeX account. It’s 100% free, and no credit card is needed.
- Step 2: Link your investment account manually or automatically. We analyze your fees, but can’t and don’t touch your money.
- Step 3: We scan your account for hidden fees, and show you how to reduce — or in some cases eliminate — as many of them as possible.
What’s the pricing model of FeeX?
These are the main types of fees:
- Expense ratio - Mutual funds, ETFs and even no load funds carry an expense ratio. This is a small percentage – anywhere from a fraction of a percent to as much as 2% or more of your balance – that is skimmed off of your return.
- Plan fee - If you have a 401(k) account, your plan provider is probably charging you these fees for the privilege of holding your money.
- Advisory fee - Financial advisors charge percentage fees that appear small but add up fast. Luckily these fees are often negotiable.
- Transaction fee - These “pay to play” fees ding your account every time you buy or sell. FeeX helps you see the real cost of each transaction.
- Other investing fees include: wrap fees, up front sales loads, back end redemption fees, account maintenance fees and more.
FeeX is free for our users! We do have referral arrangements with some of the financial services providers, so if you open an account with one of these providers, the provider will compensate FeeX for referring you. Note that you will not be charged higher fees by any of these providers due to their referral arrangements with FeeX.
What is FeeX Concierge?
FeeX Concierge is a free service offered in our rollover center. FeeX not only uncovers the fees you pay, but will help you with your 401(k) rollover.
What is FeeX Advisor Center?
FeeX can analyze your advised accounts as well. In FeeX Advisor Center, FeeX will analyze your accounts and uncover the fees you are paying. If you are paying high fees, it will make recommendations on different funds to have your current advisor switch to or other advisors to switch to.
QUESTIONS ABOUT YOUR RESULTS
How is my fee grade determined?
FeeX's fee grades are based on a grading scale that compares the total fees charged in any given account. Total fees are the sum of 1) the average expense ratio of all the investments in all your accounts, and 2) any additional account fee, such as plan fees in 401(k)s. Other fixed sum fees may exist, but they are not calculated into the grade as they usually have a much lower impact over time.
How do you find my current fees?
What's the grading scale for fees?
- A total fee of up to 0.05% is worth an A+
- A total fee above 0.05% and up to 0.1% is worth an A
- A total fee above 0.1% and up to 0.18% is worth an A-
- A total fee above 0.18% and up to 0.23% is worth a B+
- A total fee above 0.23% and up to 0.3% is worth a B
- A total fee above 0.3% and up to 0.4% is worth a B-
- A total fee above 0.4% and up to 0.5% is worth a C+
- A total fee above 0.5% and up to 0.6% is worth a C
- A total fee above 0.6% and up to 0.7% is worth a C-
- A total fee above 0.7% and up to 0.99% is worth a D
- A total fee above 0.99% is worth a F
We scan your account to find the fees that you’re paying, and sum them up on the results page. Some of these fees you may have seen on your account statement. Others, such as fund expense ratios, are quietly subtracted from your balance.
What does FeeX mean by high, average and low fees?
High fees are any fees that can be significantly reduced.
If the long term effects of reducing these fees are small (up to a 5% differential), FeeX refers to them as average fees, which means they are not very high, but can still be reduced
Low fee investments are those for which FeeX can’t find a similar alternative with lower fees. As FeeX evolves it might find new ways to reduce even more fees, so that fees once deemed “low” may later be considered "average" or “high.”
How do you calculate my future balance?
The easiest way to understand the long-term impact of fees is by seeing how they affect your future balance. FeeX considers two scenarios: your estimated future balance if you do nothing, and your estimated future balance after you apply FeeX’s fee reduction suggestions.
In 401(k) plans, FeeX considers three scenarios: your estimated future balance if you do nothing, your estimated future balance after you rollover, and, when relevant, your estimated future balance after you optimize your investments within your current plan.
Because FeeX only suggests switching to “similar” investments, FeeX runs all of these calculations assuming the same rate of return (determined based on your asset allocation). Note that FeeX assumes for calculation purposes that you won’t add any additional capital to your account.
Why are the future balances “estimated” and not guaranteed?
The fact is that no one, including FeeX, can predict future performance. Your original portfolio may perform better than the similar alternatives we’ve found, and the alternatives may surpass your original choices. What FeeX can guarantee is that a low fee fund costs less than a high fee fund. Moreover, lower fees make it much more likely for a fund to perform better because they give it a built-in advantage: the gap in fees is “added” to returns. So if a fund has a predicted return of 5% but charges a 1% fee, 20% of your returns will be lost to fees. If you lower this fee to, say, 0.2%, then only 4% are lost to fees; the lower fee gives you a 16% advantage in returns before the investing even starts.
How do you come up with similar funds?
FeeX’s similarity algorithm analyzes over 15 investment characteristics like investment category, asset allocation, strategy, geographical allocation and more. FeeX gives each its own weight and calculates the similarity of any two investments based on a scale of 0 to 100%. Funds with a similarity ranking of 85% and higher are considered “similar.”
Do you take performance into account?
When estimating losses to fees over a certain number of years, how does FeeX calculate the rate of return?
Yes! Performance is, of course, an important factor in choosing your investments. When we show similar lower-fee alternatives to your holdings, we take the performance factor into consideration by preferring alternatives that have performed either as well as or better than your current holdings in at least one period (i.e. 1 yr, 3 yr, 5 yr, or 10yr).
And of course, performance is never guaranteed, but fees almost always are. We'd love to hear what you think of the alternative funds we find for you—send us your feedback here
Should I rely upon FeeX results to make investment decisions?
FeeX's future returns assumptions are based on your asset allocation. For each Lipper investment category (such as "Equity US" or "Bond USD Medium Term"), FeeX determines an average asset allocation by considering all the funds in that category. Then FeeX assigns the category a predicted rate of return based on the following:
- Stocks: 5.83% average return – based on an academic survey published by Graham, John R. and Harvey, Campbell R., The Equity Risk Premium in 2016 (August 2, 2016). Read online here.
- Bonds: 2.10% average return – based on the 20-year Treasury Bond Yield as of September 19, 2016. View online here.
- Cash: 0.30% average return – based on the 3 month Treasury Yield as of September 19, 2016. View online here.
What is a Brokerage Window?
There are several things to consider before buying or selling any security:
- Are the specific investments right for you?
- Is the allocation right for you?
- Will there be trading fees from your investment firm?
- Are there tax implications?
These are considerations which may influence your investment choices. FeeX’s focus is on the fees that you’re paying in your current investments versus the amount of fees you could be paying in other investments. FeeX uses it’s best judgment in recommending similar alternatives with lower fees, but cannot guarantee the performance of any recommended investment product or account since past performance is not indicative of future performance. In addition, we do not aim to assess your investment style and allocation choices.
Although FeeX has made it’s best effort to provide you with the information needed to make a decision and we are a SEC-registered investment adviser, FeeX’s advice and information should not be interpreted as an offer to sell securities or imply a certain a certain level of skill or training.
A Brokerage Window, also known as a "self-directed brokerage account", allows investors to directly trade within a brokerage's offerings through a retirement plan such as a 401(k). Sponsored 401(k)'s often have limited funds to choose from, but the investor can open up a Brokerage Window to have the ability to trade most listed stocks, mutual funds and exchange-traded funds.
What is a fee disclosure?
A fee disclosure is a document issued yearly by the financial institution which uncovers information regarding all of the fees that are related to a specific defined contribution plan.
The idea behind it is to help plan participants and sponsors compare and optimize their plan investments while taking fees into account.
Financial institutions are required to provide fee information and constant access to the plan fiduciaries to help them make better decisions about the service providers they select and the investments made available under the plan.
Moreover, the financial institutions are obligated to send a fee disclosure at least once a year to the participants themselves.
The fee disclosure documents are called various names, but usually would be ‘Participant Disclosure Notice’, ‘401k Savings Plan’, '404(a)(5)' or simply ‘Fee Disclosure Statement’.
What does a fee disclosure usually include?
Why should I upload my fee disclosure to FeeX?
Regardless the name of the document, a fee disclosure should include a table with:
- Investment Name - A list of all your 401(k) plan’s investment options.
- Average Annual Total Return - Data regarding the returns from each and every investment option. The standard version shows returns from the previous 1, 5 and 10 years.
- Expense information - this includes administrative expenses, individual expenses and investment fees and expenses.
- Inception Date - Details regarding the date which the investment option had first been opened.
- Annual Gross Expense Ratio - An important piece of information that shows the ratio between the fund’s overall fees and the amount of money invested in it.
- Note: ‘Plan Administrative and Individual Fees’ can be both in dollars ($) or in percentage (%).
View examples of fee disclosures for:
In many 401(k) plans, the funds that you can choose from are repackaged funds or private funds, which are not publicly traded and are more difficult for FeeX to identify. By uploading your fee disclosure form to our site, you will help us identify those holdings, which will help you and other users in your company on the same plan to get a better picture of your fees. If your plan is from a previous company, we will also make IRA recommendations for rollover decisions.
Where can I find my fee disclosure?
In what format should my fee disclosure be when I upload it to the site?
There are a few ways you can find your fee disclosure. The first is to go on your financial institution’s website and log into your account (for an example, you can view how to find your fee disclosure on Fidelity's website here)
. Once you login, you can go to the plan summary or plan documents. On some websites, you may have to look under plan information or legal and regulatory information. You can then click on participant fee disclosure.
The other way is to contact your plan administrator. You can either call them, email them or call the financial institution where your 401(k) is held. Your plan administrator is required to send you a quarterly statement, so you may even have a hard copy laying around.
If you are still unable to find it, we are happy to help you go through the process and locate your disclosure.
PDF format is fine.
How much time does it take FeeX to analyze my fee disclosure once I have uploaded it to the site?
A few days, depending on the queue. Since we are receiving many fee disclosures every day it may take a while until we implement all of them. We will update you as soon as yours is implemented to the site so you can begin reducing your fees!