FeeX, a free service that sniffs out hidden fees in retirement and savings accounts, announced that it has raised $2.75 million in new funding. The round was led by Collaborative Fund.
The new capital brings FeeX’s total funding so far to $12.1 million. The company was founded in 2012 by Yoav Zurel, David Weisz, Eyal Halahmi, and Waze founder Uri Levine.
To use FeeX, consumers create an account on its website and connect the investment accounts they want it to scan. Citing research from State Street that found Americans spend about $600 billion on hidden financial fees every year, FeeX says its goal is to save users money and increase transparency in the financial industry.
Its algorithms identify costs that people often overlook—including account maintenance fees, asset-based fees, and expense ratios from mutual funds—and presents it in a report along with alternative financial products that may be less costly.
“An average American household pays $155,000 in 401K fees over the course of a career,” chief executive officer Zurel tells TechCrunch. “Many of these fees are hidden or hard to understand. Fees in IRA and taxable accounts can be even higher. If you don’t know how much you are paying in financial fees, you are almost certainly paying too much.”
One of FeeX’s newest products is the 401K Rollover Center, which examines at fees in inactive 401Ks and then tells users if they should keep those accounts open or roll them over into an IRA or their new employer’s 401K. Data is gathered from FeeX’s own analysis of plan fee disclosures, as well as documents uploaded by users. The startup monetizes by taking payments from IRA providers if new users sign up through FeeX’s platform.
Collaborative Fund announced in tandem with the funding that Vikram Pandit, the former chief executive officer of Citigroup, has joined the venture capital firm as an investor. Zurel said that FeeX plans to draw on Pandit’s experience as it expands its product to identify fees in other financial services, including bank accounts, credit cards, and insurance.