If someone were to ask what the management fees are on your investment accounts, would you know the answer? The truth is most people have no idea how much they pay their broker annually. Failing to understand investment fees can end up costing investors thousands of dollars. Luckily, FeeX is trying to eliminate the fees that individual investors pay each year.

What is FeeX?

FeeX was founded in 2012 by Uri Levine, Yoav Zurel, David Weisz and Eyal Halahmi. It is a free service that helps investors identify and reduce the different fees associated with their IRA, 401(k), 403(b), brokerage and other investment accounts. The idea for FeeX came about after co-founder Uri Levine found that he had been charged thousands of dollars on his retirement account. Though Levine was able to get his fees reversed after spending hours on the phone with customer service, he wasn’t satisfied. Levine wanted to help solve this problem for others.

FeeX calls itself the "Robin Hood of fees.” The company aims to provide easy-to-understand information on the types of fees investors are paying for their investments. If investors aren’t careful, fees can easily take away up to a third of their investment accounts. According to FeeX, the average US household will end up paying over $155,000 in hidden 401k fees during the lifetime of the account.

As of the fourth quarter 2014, FeeX had over 60,000 registered users and has helped locate $277 million worth of fees.

How does FeeX work?

After users sign up, they are asked to link to their investment accounts so that FeeX can check for the eight different kinds of possible fees. These fees include: mutual fund expense ratios, exchange traded funds (ETF) expense ratios, advisory fees, wrap fees, sales loads, redemption fees, transaction fees and account maintenance fees. Once FeeX has assessed an investor’s portfolio, it reveals the DamageMeter, which tells how much of the investment is being eaten by fees. Reports for diversified portfolios that contain a lot of mutual funds can be further broken down so investors can view the fees for each of the funds. If the fees on the account are higher than they should be, FeeX will show investors alternative funds that offer the same or better historical performance as well as lower fees.

What's the big deal about fees?

Over time, fees can eat away at your account and hinder an investor’s progress towards amassing retirement savings. For a better idea of how FeeX can help investors save money, look at these examples.

Assume that two investors each invests $100,000 for 25 years at an average return of eight percent. The first investor has annual investment fees of just 0.75 percent, whereas the second investor’s annual investment fees stand at 2 percent. Since the first investor has annual fees of just 0.75 percent, her net gain for the year would be 7.25 percent.  That means after 25 years her $100,000 investment would be worth $575,350.54. Meanwhile, because the second investor’s annual fees equal 2 percent, his net annual gain would be just six percent. After 25 years, his $100,000 portfolio would be worth $429,187.07. Had the second investor used FeeX, he would have been able to find similarly performing investments that wouldn’t have cost nearly as much over 25 years.

How much does FeeX cost?

FeeX has raised $9.6 million in funding to date, which allows the company to make its service free for users. Eventually, the company plans to offer some premium services, but for now investors can locate and reduce their fees at no cost.

The Bottom Line

If you are unsure of how much money you are spending on investment fees, then FeeX is a great service. It analyzes your portfolio and then provides remedies that will help to keep more of your hard earned money where it belongs—in your account.