FeeX, which helps users save on hidden retirement fees, has raised $3 million in Series A funding from Blumberg Capital. Co-founded by Uri Levine from Google-acquired Waze, the startup aims to raise awareness of excessive fees through its crowdsourcing platform. The funding will go towards the company’s US launch in early 2014.
Retirement fees in America could add up to anywhere from $30 billion to $60 billion total per year, but according to a 2011 AARP study, seven in 10 Americans are not aware of the fees charged to maintain their 401(k) accounts. Many workers also lack a frame of reference to find other options. FeeX co-founder and CEO Yoav Zurel tells TechCrunch that by accumulating retirement fee information with FeeX, users can compare what they are paying to others with comparable accounts.
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FeeX shows you the real accounts of others with similar financial characteristics. For example, it might show you users in similar employment or who have invested the same amount in their 401(k) plans. After linking up your own account, the platform places you on a “Sucker Meter” based on how much you pay in extra fees. After seeing the comparison, users can either confront their current companies about lowering fees or switch to a different company.
In order to use FeeX, users have to connect their personal retirement accounts, which may be a deterrent for potential users. To protect privacy, Zurel tells TechCrunch, all online accounts are completely anonymous. Others can only view how much each account is paying, without viewing names, social security numbers or other sensitive information. With more than 6,500 users in Israel, Zurel says privacy has not been an issue for most people.