Investment fees are one of the biggest culprits in reducing investment returns. Beyond the performance of your stocks and bonds, if you're paying out a bunch of fees every year – you're just losing money.
While some investment fees are transparent, many fees are hard to spot, and harder to calculate how much they cost over time.
The most common investment fees that erode returns are:
- Commissions (this is what it costs to buy and sell your stocks, bonds, and ETFs)
- Annual Fees (this is what ETFs and mutual funds charge annually as a percentage of your holding)
- Loads (this is a commission built into a mutual fund)
- Advisory Fees (these are fees your financial advisor or firm charge you to manage your money)
Imagine you had a ETF that returned 5% last year. Well, if the ETF charged an 0.50% annual fee, and your advisor charged another 1% annual fee per year, that 5% return dropped to 3.5%. That's how fees can eat away at your returns.
But what if there was a simple solution that allowed you to know what you were paying in fees, AND suggested a better alternative? That's exactly what FeeX does – and it does it for free!
How FeeX Can Help You Pay Less In Investment Fees
FeeX is a FREE service that allows you to connect your investment accounts to their software, and it will analyze your holdings and provide you with recommendations about similar investments with less fees.
For example, in a past article I showed you how the majority of people who invest in the S&P 500 invest in an ETF called SPY. However, SPY charged double the fees of a fund by Vanguard, VOO. They both own the same 500 stocks – the stocks that make up the S&P 500. But you pay 50% more to own SPY versus VOO. Crazy!
The fact is, unless you had spent a lot of time doing your homework, navigating different financial sites, and looking directly at the annual investment fees, you would have never know that. But FeeX does all the work for you, instantly.
FeeX saves you time, but more importantly, they save you money (and potentially lots of it).
How It Works
When you connect your accounts to FeeX, it analyzes all of your holdings and provides you with a set of recommendations. Here's an example from my accounts:
As you can see, inside one of my accounts, it found one potential change. It also highlighted my two other funds, and showed me that one of them is already the lowest fee fund, and the third simply has no low-fee alternatives.
It also shows you the potential savings by switching funds:
By switching from the Fidelity Small Cap ETF to the Schwab Small Cap ETF, FeeX estimates that I will save $2,083 over the 36 years (because that's when I plan to retire). Now, as you can see, that could be a little exaggerated – but they're trying to make a point. There's money on the table that you're potentially losing.
When I first signed up for FeeX, I actually had a single fund that was potentially costing me $30,000 because of outrageously high fees – and I didn't even know about it. FeeX caught it. That's a good amount of money right there.
If you want to learn about the savings, FeeX gives you a full breakdown, including how similar the funds are to each other:
As you can see, there is only 0.01% expense ratio savings between the two funds, but the Schwab fund also has a little better historical performance.
At this point, FeeX leaves the choice to you. Now you at least know the options, and what else is out there to potentially invest in.
Why I Love FeeX
This is why I love FeeX:
- They bring transparency to your investments and fees
- They provide a great comparison, so you know WHY they opt for one ETF over another
- All of the information they provide is FREE
There is currently not a better solution to optimizing your portfolio for fees that by using FeeX.
How FeeX Makes Money
FeeX does look to make money, and I really appreciate how they go about making money. Why? Because they cater to lazy people like myself.
FeeX allows you to pay them to make the changes for you for a fee:
For $9.99, they will make the switch for you. You might be wondering why that is convenient?
Well, when you rebalance your portfolio, it requires at least 2 days of work. On day one, you go into your account and place a sell transaction. You need to wait for it to settle, then you go back into your account on day two, and buy the new fund. If you want to just avoid all that, you can for $9.99.
The second way they make money is by offering a concierge 401k rollover service. They look at your 401k, analyze the fees you pay, and if it makes sense, they will help you rollover your 401k to a low fee alternative. This service is 100% FREE for users – FeeX get's a commission from the company that they are rolling over your 401k to. And they're transparent about it – which I love.
Try FeeX Out For Free
If you have 10 minutes, try out FeeX right now. I think you'll be very surprised by how easy it is to use – and whether you use any of their paid services or not, you'll at least know where your portfolio stands when it comes to fees.
Have you used FeeX? What was your experience?